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Automotive Industry Collapse Quickens, Toyota and Honda Now Asking For Loans and GM Issues Going Concern Notice

March 5th, 2009 | Posted in: Financial

The collapse of the new car market has been breathtaking and appears to be quickening its pace.

Tuesday all the automakers reported sales that were as an industry down a total of 41% compared to February 2008. GM led the loss with 53%, followed by Ford with 48% and Chrysler with 44%. Toyota posted a 40% drop, Honda dropped 36%, and Nissan dropped 37%.

This pace of sales equates to about 9.1 million vehicles per year in North America, the lowest since 1981. This is down from its peak of over 17 million.

Per Standard and Poors equity research analyst Efraim Levy “We are in an automotive depression amid ‘The Great Recession,’ as shell-shocked consumers fearful for their jobs, the value of their homes, and stock market assets are wary of making the sizable discretionary purchases of new vehicles.”

Along with these sales woes, even Toyota and Honda are now reported to be requesting government loans from Japan. Toyota has asked for $2 billion, and Honda is asking for $100 million (source).

Meanwhile the Presidents Task Force on Autos is reviewing GM and Chrysler’s restructuring plans. They have met with GM’s top executives and will be meeting with GM’s bondholders today. GM needs $2 billion more by the end of March in order to stay solvent. That date is also when the Auto Task Force is expected to decide on whether GM and Chrysler get more loan money, or be allowed to enter into bankruptcy. Toyota too will be meeting with the Auto Task Force (source).

Ominously, today GM’s auditors issued a going concern statement in a 10-K filing raising doubts that the company can survive. They wrote “The corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern.”

Further the statement said “If we fail to [execute the Viability Plan successfully], we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code.”

Finally it was written “there is no assurance that the global automobile market will recover or that it will not suffer a significant further downturn.”

And all the while we hope for our Volts and a country less dependent on oil.

UPDATE | GM Issues the following statement:

Auditors are required to assess whether there is substantial doubt about an entity’s ability to continue as a going concern over the next year. Given GM’s public statements on our liquidity position dating back to the end of 2008 and more fully disclosed in our February 17 viability plan submission, the opinion rendered in our 10-K was not unexpected.

That opinion is dependent on a number of factors including our ability to execute our viability plan, compliance with our U.S. Treasury loans, volume recovery of the industry, and access to additional funding from the U.S. and certain other governments. Once global automotive sales recover and GM’s restructuring actions generate the anticipated savings and benefits, the company is expected to again be able to fund its own operating requirements.

The auditor’s opinion has no impact on the aggressive actions we are taking to restructure our business for long-term viability.

Posted by: Lyle

171 Responses to “Automotive Industry Collapse Quickens, Toyota and Honda Now Asking For Loans and GM Issues Going Concern Notice”

statik Says:
March 5th, 2009 at 7:12 am

I’m going to love this thread

/game on

I’m not really sure why the market is reacting to this news this morning pre-market, it was telegraphed on GM’s much-delayed Q4 report.
——————-

The company said in its filing that its future depends on successfully executing the viability plan submitted to the government in February to justify the loans.

“If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code,” GM said in the annual report, filed with the U.S. Securities and Exchange Commission.

GM, the report said, is highly dependent on auto sales volume, which dropped rapidly last year.

“There is no assurance that the global automobile market will recover or that it will not suffer a significant further downturn,” the company wrote.

http://biz.yahoo.com/ap/090305/gm_annual_report.html
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Nutshell snopysis:

GM: “We want more money, we will be viable once we get it and sales increase”

Auditors: “GM has no cash, and no ability to raise any. We see the likely hood of a return to those levels officially as ‘no chance in hell,’ they probably tank further.

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Jim I Says:
March 5th, 2009 at 7:16 am

It is time for a smaller, lean and mean GM, carved out after a C11 filing. The justification of pouring $100B of our tax dollars into this industry is just not there. It is a bitter pill, but it is time to take it.

Or else, do what Germany is doing and take those tax dollars and give them to people to trade in their old cars for a new, more fuel efficient vehicle. That will spur car sales in the short term.

Tough choices, either way…..

and statik, I suggest de-caff cofee for you today……

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bdnk Says:
March 5th, 2009 at 7:18 am

king statik,

pardon me while I don’t kiss you a$$ like everybody else. The only thing worse than what the auto industry and the world as a whole is going through are those that seem to take some sort of pleasure in watching it happen. More obnoxious still are those that wave their streamers in the air singing their own praises about how they predicted it all along. Congratulations, your wonderful.

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Guy Incognito Says:
March 5th, 2009 at 7:21 am

I remember GM

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statik Says:
March 5th, 2009 at 7:29 am

#3 bdnk said:

king statik,

pardon me while I don’t kiss you a$$ like everybody else. The only thing worse than what the auto industry and the world as a whole is going through are those that seem to take some sort of pleasure in watching it happen. More obnoxious still are those that wave their streamers in the air singing their own praises about how they predicted it all along. Congratulations, your wonderful.
——————————–

Don’t take it/me too seriously, I’m just being light-hearted with the ‘game on’ I’m really not trying to get under your skin.

I do take this as ‘good news’ though. The best thing for GM is a restructure at this point. If the news wasn’t really, really bad, to the point of ridiculous we would probably end up plugging another 300 billion into this sector before we came to the same conclusion, I hoping the gov’t is forced to do the right thing…the necessary thing here.

You want to see my ‘attitude’ about GM change, see how I view them post C-11. I believe in GM, and the NA auto industry…but not as it stands now. This recession/depression gives the gov’t a rare chance to remake a very broken piece of its economy that was on death’s door.

If times were good they could not even attempt anything close to what is happening/being proposed now without being highly criticized by the rest of the world, abd probably even deemed illegal by the EU/WTO. Sometimes good things come out of tough times, I believe this wil be the case here for GM.

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GM Nogood Says:
March 5th, 2009 at 7:30 am

Gm should file Chpt 11 and emerge as a smaller, leaner and competitive company, maybe 2-3 million in sales. I know I would consider their products when they are in Chapter 11 under government assistance.

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charlie h Says:
March 5th, 2009 at 7:35 am

GM, through GMAC, helped hasten this day. GMAC wrote more than its share of low-quality loans, helped flood the market with cars that weren’t needed and this effort delayed the rationalization of GM.

GM rated a “going concern” notice long ago. They’ve owed more than they can handle for a long time, cash flow has been negative for many quarters and they’ve had no operating profit for years.

Thomas Friedman had it right… we don’t have untold billions to prop up losers; put the money into firms that may grow the businesses of the future.

Send GM into bankruptcy court.

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Arthur Says:
March 5th, 2009 at 7:37 am

It seems to me that the car industry is suffering disproportionately to the rest of the economy. I think there is now a dim perception in Joe Public’s mind that there are some better cars coming along and that why buy now if what you get will be obsolete in two to three years time. The more companies like Tesla, Aptera and Fisker get feted (often for free) in the media this feeling will only increase.

For example, last year on holiday in Spain I was astounded when two old English retired ladies told me that they were not going to buy a new car until they could buy an electric one. That degree of awareness and attitude if widespread (as I think it is) will cause a bigger than normal slump in new car sales. It would be good to see some unbiased market research studies done and published if only to guide those that are bailing out the car companies with public funds. Have they ever asked the questions about why people are not buying cars beyond the obvious?

In the meatime good to know Toyota and Honda are getting stuffed as well.

Go Volt, go Michigan, go USA

NPNS

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Van Says:
March 5th, 2009 at 7:47 am

Does this downturn mean we have 30% more people working in the car business than we should? 30% more dealers? Do they have some special “know how” that others might covet, like in India or China? Do we need a desperate situation like WW11 put these people to work? Maybe they could camp out near the Washington mall and we could it Obamaville.

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Joe Says:
March 5th, 2009 at 7:48 am

bdnk Says: @3

“king statik,

pardon me while I don’t kiss you a$$ like everybody else. The only thing worse than what the auto industry and the world as a whole is going through are those that seem to take some sort of pleasure in watching it happen. More obnoxious still are those that wave their streamers in the air singing their own praises about how they predicted it all along. Congratulations, your wonderful.”

****************************************************************************

bdnk, I have to hand it to you. I like a man that says it like it is. There is definitely a click that follows statik with his negativity.

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brad Says:
March 5th, 2009 at 7:55 am

Like I said before every car company will get a bailout. If the U.S. doesn’t provide one then all companies will look to be based and provide manufacturing in countries that do. Just like all companies look for tax breaks. Well in essence this is a huge tax break for them.

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charlie h Says:
March 5th, 2009 at 8:09 am

#10,

Dear Joe,

It’s “clique,” not “click.”

Your friend,
Mr. Language Person

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250volts Says:
March 5th, 2009 at 8:15 am

bdnk @3
I’m with ya on this. Sometimes Statik comes across full of himself. No doubt it’s his “self assurance” that has made him what he is (apparently successful) although at what we are not quite sure
I wish for a preiod of time, perhaps a few weeks, that I could get up in the morning and listen to the news without having to think, “is today the day the world ends”. It seems the media is obsessed with reporting on the negative. I’m convinced this negativism feeds on itself and in doing so becomes stronger and thus self fulfilling. Who amongst us doesn’t feel this weight… this dark cloud…… it’s certainly oppressing.
Statik appears to know the business end of things and I would guess he understands market dynamics better than most (certainly better than I) but it sure does get old hearing him beat that drum.
Statik – take a look into your crystal ball and tell us when it’s going to get better…… tell us that sunny days are just over that small hill and that our lives have not been irrecoverably changed forever……..

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Rashiid Amul Says:
March 5th, 2009 at 8:17 am

You know, it just figures.

People are finally starting to realize we need these cars, and now there won’t be anyone around to build them.

I vote for Chapter 11 with government backing and kill the UAW.
Hire the same workers but without their union backing.

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Dave G Says:
March 5th, 2009 at 8:19 am

#1 statik,

My nutshell synopsis: GM can’t get the bondholders to budge, and the UAW won’t play unless the bondholders do, so GM is threatening C11 in hopes it will shake things up.

From the article: Meanwhile the Presidents Task Force on Autos is reviewing GM and Chrysler’s restructuring plans. They … will be meeting with GM’s bondholders today… Ominously, today GM’s auditors… could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code.”

Both things happening today. Coincidence?

Remember, March 31 is the final showdown. Only 26 days to go…

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Tom Says:
March 5th, 2009 at 8:26 am

As one of the original people on this sight and in the first 10k on the Volt list, I would like to add my two cents.
A sponge can only hold so much water then it starts to leak. Here in South Texas there are acres and acres of unsold autos. I believe that the supply has far exceeded the demand for autos. At 75 years young I have been in the trenches for some time and have been in this situation before. I have stated over a year ago that GM needed to file C-11 and was severely criticized for the statement. If they would have completed this with a court structured plan for reorganization this would probably have been completed in three to four months. We are never going to bail them out, I don’t believe their is enough $$$ to feed their present system.
God Bless America,
Tom

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Rashiid Amul Says:
March 5th, 2009 at 8:30 am

To the Statik bashers.

He is mostly correct. A lot of people say things here. Most do it in a way that is not attacking any individuals in a rude way.
There is no need really to attack Statik. If you don’t like what he says, simply skip over his comments. I already do that for one or two people here.

And as far as there being cliques here, I highly doubt that.
But as far as anyone can become friends here, I would say I have made a few, although I don’t know most of their real names. But that is not a clique.

We can have polite disagreements with attacking anyone specifically.

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Shawn Marshall Says:
March 5th, 2009 at 8:52 am

Ad hominem attacks are s.o.p. for some posters. Some might suspect that traders may have tool envy of capitalists who actually have to produce a real product instead of living on perturbations. Which of these is productive and contributes to the common good?

Charlie H. Why did you not catch the ‘likelihood ‘ mistake, language man? You’re not playing favorites, are you?

Statik is very sharp and he does tone it down to reasonable when folks take offense but please allow me to say that anyone can be a Monday morning quarterback.

Many people on this site have agreed that GM should go C11 for a long time, regretfully. They may have a winning idea with the Volt and hopefully a Voltec division will arise from the ashes and attract some sidelined capital. We all know it has a pricing problem. We all know that what type of (X)EV should be produced is all about the future price and capacity of batteries. At the least, GM’s Volt initiative has pushed worldwide attention to primarily electric motoring to the forefront for the first time in automotive history.
Let us hope for their success.

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statik Says:
March 5th, 2009 at 9:03 am

#13 250volts:

I depress me too sometimes, lol.

I’m really not this negative a person. My problem is reality I guess. What can you do?

If times are bad, and you see them getting worse, you really can’t make yourself be positive. If you attempt to be positive and/or naively believe the things you read or see, then you lose credibility when you are constantly proved wrong. How many times can you back GM’s over-optimistic views (or flat out deceptions), just to get burned when history shows us how hollow they are?

I’m really painted into a corner here. I know I bum people out…and a lot of people don’t like me…I don’t like me sometimes. I want things to turn around, I want to look forward rather than behind, but what can I do about it? It is what it is. It is one thing to be negative for negativity’s sake, regardless or right or wrong…I don’t think that is the case here, I am just giving my opinion of how I feel ‘it is’ right now.

====================
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#130 250volts said:
Statik – take a look into your crystal ball and tell us when it’s going to get better…… tell us that sunny days are just over that small hill and that our lives have not been irrecoverably changed forever……..
————————

This is tricky, because it really is a ‘crystal ball’ type scenario, as the current situation is very foggy, it is hard to see past the next 1 or 2 market events, as everything seems to be build or aligned as if they were dominoes.

I don’t know if this is ’sunny’ outlook or not, but I would say we continue to deteriorate pretty significantly for most of the rest of the year, and then level off after that. The problem is people’s reality of what happens after we level off….in my opinion it is 5 years to a decade after that just to get back to where we were, and probably 20 years for the US to get its deficit under control.

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statik Says:
March 5th, 2009 at 9:18 am

#18 Shawn Marshall

Ad hominem attacks are s.o.p. for some posters. Some might suspect that traders may have tool envy of capitalists who actually have to produce a real product instead of living on perturbations. Which of these is productive and contributes to the common good?

Charlie H. Why did you not catch the ‘likelihood ‘ mistake, language man? You’re not playing favorites, are you?

Statik is very sharp and he does tone it down to reasonable when folks take offense but please allow me to say that anyone can be a Monday morning quarterback.

Many people on this site have agreed that GM should go C11 for a long time, regretfully. They may have a winning idea with the Volt and hopefully a Voltec division will arise from the ashes and attract some sidelined capital. We all know it has a pricing problem. We all know that what type of (X)EV should be produced is all about the future price and capacity of batteries. At the least, GM’s Volt initiative has pushed worldwide attention to primarily electric motoring to the forefront for the first time in automotive history.
Let us hope for their success.
=========================

I know we don’t always get along, but this is a excellent post. Good thoughts on GM and on ‘other things’

At the end of the day, we are all ‘Monday morning quarterbacks,’ just hanging out online venting our opinions. (sorry about the likelihood guffaw, heeh)

#17 Rashiid:

I think you are right, we do have a community here thanks to Lyle (and a exceptional one at that), and most of us have made some good online friends. For some of us, we come here every day and meet up with ‘familiar faces,’ and it is a part of our day…a place we can bounce our thoughts of other like-minded people. I know I would miss it if it were not here.

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ThombDbhomb Says:
March 5th, 2009 at 9:31 am

Statik is a smarty pants. His arguments are usually supported by data and references. It is hard to argue with him on rational matters. His opinions stem seem well-reasoned. Emotional pot shots don’t seem to phase him. I wish more people were like him.

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Starcast Says:
March 5th, 2009 at 9:34 am

Some times if you can’t say anything good it is better to say nothing.

I should take my own advice. ;>)

Statik is no more nagitive then Obama. But thats a bigger problem.

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ThombDbhomb Says:
March 5th, 2009 at 9:40 am

#16 Tom said, “Here in South Texas there are acres and acres of unsold autos.”

When the first 10k Volts come out, they will be a hot item due to limited supply and pent up demand; the market will dictate the cost. Right now, the new car market has high supply and little demand. Will the car dealers start selling cars at way below invoice prices to clear out excess inventory?

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ThombDbhomb Says:
March 5th, 2009 at 9:43 am

#22 Starcast

“Statik is no more nagitive [sic] then Obama”

Obama seems pretty positive, even hopeful. I suppose that paints Statik in a good light…or are you being nagitive?

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wirenutjd Says:
March 5th, 2009 at 9:44 am

Read this on Yahoo this morning.

DETROIT – General Motors Corp.’s auditors have raised “substantial doubt” about the troubled automaker’s ability to continue operations, and the company said it may have to seek bankruptcy protection if it can’t execute a huge restructuring plan.

The automaker revealed the concerns Thursday in an annual report filed with the U.S. Securities and Exchange Commission.

“The corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern,” auditors for the accounting firm Deloitte & Touche LLP wrote in the report.

In pre-market trading, GM shares fell 18 percent from Wednesday’s close, to $1.80.

GM has received $13.4 billion in federal loans as it tries to survive the worst auto sales climate in 27 years. It is seeking a total of $30 billion from the government. During the past three years it has piled up $82 billion in losses, including $30.9 billion in 2008.

The company faces a March 31 deadline to have signed agreements of concessions from debtholders and the United Auto Workers union to show the government it can become viable again. On Feb. 17 it submitted the restructuring plan to the Treasury Department that includes laying off 47,000 workers worldwide by the end of the year and closing five more U.S. factories.

GM said in its filing that its future depends on successfully executing the plan.

“If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code,” the Detroit-based automaker said in the annual report.

GM, the report said, is highly dependent on auto sales volume, which dropped rapidly last year. “There is no assurance that the global automobile market will recover or that it will not suffer a significant further downturn,” the company wrote.

But Harlan Platt, a professor at Northeastern University in Boston who teaches about corporate turnarounds, said the auditors’ concerns don’t mean GM is headed for a bankruptcy filing. The auditors, he said, are merely stating what the world has known for months.

“A company which has borrowed $13.4 billion and has asked for billions more around the world is obviously in trouble. So this is anticipated,” he said.

Platt said the union concessions and debt restructuring laid out in the government loan terms, plus GM’s own restructuring steps that include shedding unprofitable brands, will make the company healthy again once auto sales recover from current low levels.

“I think the government has forced the hands of everybody,” Platt said. “In 18 months to 24 months, I anticipate they will be profitable, in the black. A mean and lean competitor that will be world-class.”

U.S. auto sales in February dropped to the lowest level since December 1981. Last year, automakers sold 13.2 million vehicles in the U.S., about 3 million less than the 16.1 million sold in 2007. Analysts and auto company executives are predicting sales of just over 10 million this year.

GM has said it wants to avoid bankruptcy protection because it would scare off customers. Car buyers, the company has said, would be reluctant to buy from an automaker in Chapter 11 due to fears that it wouldn’t be around long enough to honor warranties or make replacement parts.

GM, in its viability plan submitted to the Treasury last month, said it explored three bankruptcy scenarios, all of which would cost the government more than $40 billion.

Chief Operating Officer Fritz Henderson said at the time that the government would be the only place the company could get financing for a Chapter 11 reorganization, because the credit markets are frozen. The worst-case bankruptcy scenario would cost the government $100 billion, Henderson said, because revenue would severely drop due to a lack of sales.

He said there is not a lot of research about whether people would buy cars from an automaker in bankruptcy protection, but “that which is there suggests that sales fall off a cliff.”

GM warned last month that its auditors may raise the “going concern” doubts, and industry analysts said auditors’ statements may trigger clauses in some of GM’s loans, placing them in default.

But the company said in its filing that it has received waivers of the clauses for its $4.5 billion secured revolving credit facility, a $1.5 billion term loan and a $125 million secured credit facility.

“Consequently, we are not in default of our covenants,” the report said. “If we conclude that there is substantial doubt about our ability to continue as a going concern for the year ending Dec. 31, 2009, we will have to seek similar amendments or waivers at that time.”

GM spokeswoman Julie Gibson said there is no clause in the terms of the government loans that places them in default if the auditors raise doubts about GM’s ability to keep operating.

“That was not a condition of the loan. It’s not in the agreement,” she said

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Silvio Says:
March 5th, 2009 at 10:04 am

I’ve also been asking myself the same question: when is the stream of bad news going to end? It really looks like bad news feed on bad news. But let’s roll some stones and see what’s underneath. Who feeds us all these bad news?
I think the numbers are guilty. -20%. -30%. -40%. But what do those numbers mean? Well, if you look closely to the numbers, they mostly compare this month’s performance with last year’s. So January 2009 is -30% compared to January 2008.
Then it’s no wonder that things look bad: we’re comparing against a period when things were still kinda going OK. It was past the peak, but still relatively close to the peak.
So to answer the question – when are bad news going to stop? – we have to look at when bad news began. And I mean really bad news. I think we would all agree that September 2008 was the month when the slowdown with single digit losses became a crash with double-digit losses.
I think double-digit bad news are going to hit us until August 2009. Then, september 2009 is a question mark. But do you think October 2009 can be a double-digit loss month, after October 2008 has already seen double-digit losses? I doubt it. How can you have in Oct08 a -30% vs. Oct07 and then in Oct09 a -30% vs Oct08, which overall means Oct09 is a -51% vs Oct07?
I think the losses will get back to single digits this fall and that will be seen as “good” news. Well, -5% is good compared to -30%, right? So all of us after getting used to the -30% bad news, we’ll react positively to the -5% “good” news, and that will start a positive feedback that would lead to a recovery and positive numbers sometime in 2010.
It’s hard to say if things will really work that way. But there is a chance.

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Schmeltz Says:
March 5th, 2009 at 10:06 am

Lots of different people have lots of different ideas. I don’t see the need to take shots at other people here simply because they may look at something differently. Statik has an exceptionally good read on the financial situations of these companies, and I look forward to reading his viewpoints on them. Like Rashiid said so well in post #17, “We can have polite disagreements without attacking anyone specifically.” Agreed 100%.

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Tim Says:
March 5th, 2009 at 10:07 am

WOW! We never saw this coming…

I know, Congress can sell the Federal Reserve Bank more Gov’t bonds with adjustable rates and we’ll (you and I) be the collateral. The Fed will order the US treasury to print up more fiat currency (see it does grow on trees). We can throw that money down the bailout hole too. It’s much more fun than using that “old school” stale bankruptcy system.

Yes, you can borrow from your children to pay off your debts as long as you have a big enough hammer to smash their piggy bank and they remain asleep while you commit the crime.

It’s not theft when you take from your children or grandchildren, is it?

Ignore the man behind the curtain.

Problem solved, comrade. NEXT!

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Aspherical Says:
March 5th, 2009 at 10:12 am

I say farewell to GM as we know it. And that is a good thing. This socialist BS is keeping only delaying the inevitable and sucking resources from our government. The Big 3 operate on an old business model that requires selling high margin cars, but that doesn’t work when the market is flooded with too many damn cars already!

As for my personal experience with the auto industry… I worked with a tier 1 automotive supplier and managed the Chrysler programs. Working with Chrysler was a total joke. When their initial design didn’t work, they would just lighten the specs so that they didn’t have to do any more work. As for the GM programs, GM bullies their suppliers because they have the production volume. So suppliers try to squeeze every dollar out of GM due to the BS they have to put up with (volume swings, constant changing of specs, unwilling to work with supplier, having unrealistic expectations, etc…). When something didn’t work in the Honda program, we had execs fly to our design center and worked with the team to create every detail of a plan to fix the issue. I gained alot of respect for Honda during my time there.

This is just rambling really, but I am not surprised that this is happening. How much longer are we going to let this continue? It’s called Capitalism. The business model the Big 3 operate on is obsolete. They have to pay. Anyone else who believes otherwise is lying to themselves and clinging on to the past.

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Jim I Says:
March 5th, 2009 at 10:12 am

Forget about personalities. If you put more than one person in a room, there are likely to be disagreements. And in a blog, where it is all anonymous, it gets even worse….

As to the topic, what do you think GM should do, if forced into C-11?

IMHO, take the best models from all divisions, and split them up into two groups, a lower end brand, probably Chevy, and a higher end brand, probably Caddy. Get rid of everything else. The days of having six or seven separate divisions all selling to the same base of customers is over. Produce world class vehicles with top notch quality, reliability, and a decent warranty and service availability, and the new GM will be around for another 100 years.

And no more excuses. Do the job, do it right, or get out of the business. That has been our motto since I started my business. May 1st we start our 30th year, and that motto still works as well today, as it did on May 1, 1980! I just have a lot less hair, and now it is gray.

I truly hope that GM is able to pull this off. I really would like my first electric car to be an American brand!

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N Riley Says:
March 5th, 2009 at 10:33 am

Just another stone in the path. More doom and gloom. At this point I am beginning to think we would have much better off if the government had stayed out of the financial and commercial markets and let them all fail and restructure. It would have been a big hit, but the worse would be over by now. Stronger companies would rise up out of the ashes and the American people would not be saddled with debt that will last until our grandchildren are middle-aged or more. Plus, the damn government would not have this existing excuse to change itself into a quasi-socialist government. By the end of the year, with all the bills the congress and Obama are proposing, we will be a fully functioning socialist country. Well, not sure just how much functioning we will be. We will be a crippled socialist country. Thank you to all who helped put us in this position. I would love to get my hands on some scrawny necks.

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Domingo Says:
March 5th, 2009 at 10:38 am

Ford Motor Co expects electric vehicles will represent a “major portion” of its lineup a decade from now as the automaker breaks away from a recent reliance on pickup trucks and SUVs, Chief Executive Alan Mulally said on Wednesday. “In 10 years, 12 years, you are going to see a major portion of our portfolio move to electric vehicles,”

I am convinced these CEO do get it, but $ome external force [pronounced] big oil is controlling their future development plans. Having said this I do not expect any 100% electric vehicles from the big automakers in the next decade. If we see any mass produced ones it will be from the likes of Tesla, unless of course they get bought out.

Discusted

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Ray Says:
March 5th, 2009 at 10:44 am

You got it right Jim… I have been in business for just over 10 years now…
You got to keep your principles simple…
Quality products and the service to back it up..
My company is not big… and does not plan on being really big. Steady growth.. good pricing.. all my guys are happy and long term.. It there is a problem… it is brought up front as soon as possible… dealt with and we move on..
And everyone is kept up to speed as to the direction of the company.

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N Riley Says:
March 5th, 2009 at 10:45 am

#8 Arthur

You bring some interesting points. I suspect not much study has been done as to exactly why people are holding back car purchases. How many of us here on this site have made the same statement as the two English ladies? It has to be a contributing factor, but how much? Who really knows?

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Bruce Says:
March 5th, 2009 at 10:47 am

Now even GMs own auditors are doubting that GM is viable, stock down another 15%.

http://biz.yahoo.com/ap/090305/gm_annual_report.html

Just file chapter 11 already, your business will never turn around without it. Any more bailout money is just wasted to prolong the inevitable conclusion.

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ThombDbhomb Says:
March 5th, 2009 at 10:53 am

#31 N Riley

“I am beginning to think we would have much better off if the government had stayed out of the financial and commercial markets”

That’s deregulation (conservative) talk. The free market has its own pitfalls.
___________
“Thank you to all who helped put us in this position. I would love to get my hands on some scrawny necks.”

I think our our outsized American consumption and need for power (i.e., money) put us in this position. Why pick on the scrawny-necked? There are plenty of brawny meat heads to strangle. Just look around.

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solo2500nt Says:
March 5th, 2009 at 10:54 am

Arthur #8.

I have to disagree with you. I think people are not buying cars strictly because of the economy/credit markets. Large percentages of people used to lease cars, even from GM. That market is gone because of GMAC getting out of the leasing business by either denying the lease outright or making the terms far less favorable than they were even a year ago.

Also, people are looking at their net worth and it has plummeted. You can’t leverage your house or your 401K to buy a car like many people used to do because their respective value has tanked.

As far as people knowing about any new electric cars coming out, I doubt it. Only serious car people know about the Volt, plug in Prius/Vue, etc. Everybody I mention the VOLT to look at me like a space alien. I told 2 computer geeks at work (I used to be a computer geek too, by the way) and they were shocked. They thought it must be some golf cart or something. When they read this web sight they were astonished. I bet today less than 5% of the population know what the Volt is.

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N Riley Says:
March 5th, 2009 at 10:57 am

#14 Rashiid Amul

“I vote for Chapter 11 with government backing and kill the UAW.
Hire the same workers but without their union backing.”
—————————————

Sounds great, but when you think about it there is no way GM could restructure without becoming unionized as soon as it filed the papers. The union would not just go away once C11 is filed. Even if it did, these workers are ingrained in the union mind meld and would just setup the same union. They would bargain with GM and if they did not get what they wanted, they would shut GM down with a strike. Ford and Chrysler would “get the message” and would settle a contract also. That is what has happened in the past and would happen again. I would like to see a poll of the UAW workers about who thinks they could not work for an auto company without the UAW. I suspect that 90% would vote to get back into bed with the same money wasting, high on the hog living union bosses as they have now. In other words, nothing would really change. Plus, our wonderful government would be supporting the union and forcing the auto makers to make “deals” with “labor”. Its all about “jobs” congress and the president will say when what they really mean is its about “votes”.

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Arthur Says:
March 5th, 2009 at 11:03 am

solo2500nt#37

Thanks for the response. I do not think its a case of I am right, you are wrong. What we lack is any detailed information as to the many and various reasons that are stopping people buying new cars.

My theory outlined earlier that it may be something to do with the ’something better coming later’ effect (we know well from consumer electronics) is part of it may be at the margins or it could be as high as 20%. Either way it is important for us all to have some verifiable data. I bet GM or the US Goverment do not know all the reasons either and that if true would be worrying.

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Eco Says:
March 5th, 2009 at 11:04 am

There is just no way around it, GM and Chrysler have to be dismembered in order for any US car production to continue.

The car market and car industry has not changed, while consumers are far more demanding, and want to buy cars in a different way under different terms.

The industry won’t learn that until it goes broke, and has to reform.

Painful, yes. Necessary, yes. Inevitable? Guess we’ll see.

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David K (CT) Says:
March 5th, 2009 at 11:06 am

solo2500nt @ 37

I agree, except I think 5% of the population knowing about the Volt is a little too high…probably more like 1 to 2%.

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GM blames customers. Says:
March 5th, 2009 at 11:11 am

I like how GM blames their customers in their defense of their past terrible decisions and products and to try to avoid C11 now. If GM stopped using their complete mis-take on customers’ preferences as a shield in order to keep doing the wrong thing and realized that they can use the customers as a weapon to do the right thing, Voltec applications, subject to proper marketing, they’d actually succeed, despite themselves. This site gets it.

I can’t believe that it all comes down to GM’s marketing, when they’ve had such a dismal, disasterous record in general and especially with electric drive, continued with their recent shouts of the Volt is useless until massive infrastructure changes happen first and all cities should be just like San Francisco (Fruitcakes) , New York (crisis causing Wall Street) or Washington DC (20% approval rating Congress), the three most loathed cities in the US.

Maybe they need to make Voltec Buicks and focus on Chinese markets, since China is now the only thing keeping the rest of the world from economic depression? The Volt is more upscale and a leapfrog application of electric drive, so it won’t directly compete with the already produced BYD F3DM. Can you make a dollar (fake) grille aerodymanic? i||||i

I owned a Buick Skyhawk, which created weird tire wear from its balance, had two recalls, blew out a water pump, had a bad alternator, had pieces falling off, inside and out, and was structurally unsound within three years and in less than 40,000 miles. It had to be towed to the junk yard.

A small sample of just my ownership history:

Chevy Monza (sporty looking crap)
Buick Skyhawk (sporty looking crap, can you believe I made the same mistake twice?)
Datsun B210 (reliable, great mileage, miss that car)
Chevy Vega (bad wiring, felt like lead, engine constantly overheated at nothing, my last GM vehicle)
Ford Fairmont, four door sedan (nice, solid feeling, attractive, reliable car but body didn’t last long)
Toyota Tercel (reliable, great mileage)
Cadillac Coupe DeVille (totally impracticle, very high maintenence)
VW Jetta (fun, terrible electrics, leaky)
Dodge Dakota pickup (solid, useful, short range)
Volvo 850 Turbo (good cruiser, terrible mileage, very high maintenence)
Toyota Prius (reliable, great country cruiser – I use it as a mini RV, great mileage)

If I was a young up and coming family, you couldn’t beat me off the 2010 Ford Fusion hybrid with a stick. As it is, the Prius is plenty big and competent enough for my empty nester hardcore weekend backcountry recreation warrior behavior (hike, bike (mountain and moto), kayak, ski, snowshoe).

And your offering, GM, is….?

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N Riley Says:
March 5th, 2009 at 11:17 am

#17 Rashiid Amul

“We can have polite disagreements with attacking anyone specifically.”
———————–

I know you meant to say “without” attacking anyone specifically.

Absolutely agree with this. I view Statik as someone who knows what is going on. Sometimes much sooner than I ever could. I appreciate his comments. Don’t always want to hear what he is saying, but i know he is speaking the truth. Truth is a beautiful thing just by itself. There needs to much more truth spoken in the world.

I also value the comments by several others and even when I am far behind trying to “catch up” with what is going on with the news on this site and don’t feel like reading all of the comments, I scan for those individuals that I feel are giving us honest opinions. Those that are spewing junk, I try to avoid.

I know I have “trashed” our government and politicians many times on this site and I am not even going to promise I won’t do it again because I will. Maybe today. Already have to some extent. But I try not to “attack” anyone on this site beyond being a little sarcastic to some of the silly comments made by some people.

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Mark M Says:
March 5th, 2009 at 11:19 am

Just think how much better GM would have been, and the whole country of taxpayers if they would have had the stones to file chapter 11 back in October when they actually ran out of money. It would have saved our country billions, they would have restructured to eliminate many of the problems still affecting them, and would be on the road to recovery.

We need a groundswell movement in this country to NOT bailout any more companies. It is only hurting us all in the long run. No company is too big too fail.

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Arch Says:
March 5th, 2009 at 11:21 am

http://finance.yahoo.com/news/GM-auditors-raise-doubts-on-apf-14550933.html

Take Care
Arch

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RB Says:
March 5th, 2009 at 11:22 am

#25 wirenutjd quotes Yahoo as
But Harlan Platt, a professor at Northeastern University in Boston who teaches about corporate turnarounds, said the auditors’ concerns don’t mean GM is headed for a bankruptcy filing. The auditors, he said, are merely stating what the world has known for months.
“A company which has borrowed $13.4 billion and has asked for billions more around the world is obviously in trouble. So this is anticipated,” he said.
Platt said the union concessions and debt restructuring laid out in the government loan terms, plus GM’s own restructuring steps that include shedding unprofitable brands, will make the company healthy again once auto sales recover from current low levels.
========================================

This interesting comment by Platt makes the differences between an auditor’s opinion and a general opinion about the future.

The auditor is giving an opinion from a technical viewpoint, based on the resources available to a company over the next 1 year and the expenses that the company is going to have to pay over the next 1 year. The auditor is saying that after looking at all the resources and all the expenses, the company will not (in the auditor’s opinion) have enough resources to cover those expenses, for the upcoming year.

Now of course if the government puts in a lot of new money, or if the people who are owed money say they’ll take stock instead, the situation is different. The auditor’s opinion is more narrow — unless something from outside happens, the company is not going to make it, and is not going to make it for even 1 more year. That is serious stuff and is usually followed by a bankruptcy filing.

In contrast, the comment quoted above takes a more expansive view of the world, what the government might do, how auto sales might change, etc. Any of this could be true, especially over a period of some years. However what the auditor is saying is that GM does not have years. Without some major unexpected change this year that infuses resources or reduces expenses, the company will not make it for 1 more year.

A critical aspect is that auditors work for the owners, not the management. The advice they are giving is directed to GM’s owners — without outside life support, your company will go bankrupt this year.

On the other hand, what the auditor is not trying to do is forecast the government, the UAW, the bondholders, or anybody. The auditor’s opinion reflect what has been agreed to as of now, but all of that.

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wirenutjd Says:
March 5th, 2009 at 11:35 am

Maybe if this happens these cars would very desirable, check this from Edmunds website…

Trader Warns That $300 Oil Is Coming Yet Investors Are Shunning Alt Fuels

If you don’t like what you see in the rearview mirror — $145 a barrel oil and gasoline that last July topped $4 a gallon — then you won’t like what commodities trader Kevin Kerr sees up ahead when the global economy eventually gets back into gear.

Oil prices will start accelerating, he warns.

“Any economic recovery results in higher energy prices — it’s elementary,” Kerr writes in Dow Jones’ MarketWatch.com.

“That means $300 crude oil could be one year away or three years away, but certainly not much more.”

In the lessons-not-learned department, Kerr writes, “It’s disappointing that during this lull in energy prices, more immediate action isn’t being taken to stave off the rapid return of even higher energy prices.”

There’s been “almost no progress on the march to alternatives,” according to Kerr. “The global investment engine has ground to a halt. With oil prices at these levels and the market in tatters, the last place investors want to put their money is in the alternative energy space.”

Kerr’s observations came just hours before General Motors reported that its February sales tumbled 53 percent from a year earlier. Ford and Toyota sales were down 48 percent and 40 percent, respectively.

Plummeting sales have dried up revenue and that means little to spend on developing vehicles that can use alternative fuels and power plants.

Oil prices, meanwhile, have dipped below $33 twice in the past three months and inventories are nearing record highs.

We’re seriously hoping he’s overstating things, but Kerr says this is just the lull before a pretty violent storm.

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Anto Says:
March 5th, 2009 at 11:38 am

#42 GM blames customers.

GM should take a look in the mirror before they blame anyone else.

Right now the American consumer is not purchasing any vehicles at this time. I really believe the majority of the American consumer (including I) are waiting for an affordable EV vehicle to purchase…not an EV for $40,000.00. We did not forget how the oil companies and hedge fund operators ripped us off with the price of gasoline last year.

The sad thing is if Mr. Wagoner didn’t kill the EV1, GM would have been the world’s number one manufacturer of Electric Vehicles and not in this predicament. This must be the revenge of the EV1

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N Riley Says:
March 5th, 2009 at 11:42 am

#23 ThombDbhomb

“Right now, the new car market has high supply and little demand. Will the car dealers start selling cars at way below invoice prices to clear out excess inventory?”
————————–

I know that if I were a dealer, I would be offering really low prices to get people in to buy. I would rather lose 1 Million dollars by cutting prices than lose the full cost on all the vehicles in inventory. It is a tough situation and every dealer is going about it in their own way. I wish I had an answer.

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DonC Says:
March 5th, 2009 at 11:43 am

Is this really anything different? It is an auto depression. The fact that Toyota has asked for “export loans” and will probably ask for more just underscores the fact this is not a question of poor management — though that may be the case — but of a larger financial and economic meltdown.

Statik’s arguments are generally GM centric, which until late last year were appropriate but now seem somewhat misplaced. It’s not so much that the comments are negative, it’s that they are too specifically negative. When every major automaker in the world is in the process of going out of business absent government action it seems pointless to single out any one manufacturer in particular.

What we have is worldwide excess capacity brought about by incredible manufacturing efficiencies and new auto companies being started, with government backing, in the developing world.

#31 N. Riley says “At this point I am beginning to think we would have much better off if the government had stayed out of the financial and commercial markets and let them all fail and restructure.”

I think Hoover resoundingly and convincingly showed how well this would work. Not to make too fine a point, but they did call the countless shanty towns for the homeless “Hoovervilles” for a reason.

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CaptJackSparrow Says:
March 5th, 2009 at 11:45 am

“The corporation’s recurring losses from operations, stockholders’ deficit, and inability to generate sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern.”

Big phukin DUH!!!!

Ok, so If GM fails/goes down, I get first dibs of the first prototype!

The Ford Focus BEV will be my next choice. No more ICE for me except in my Brandy!

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wirenutjd Says:
March 5th, 2009 at 11:50 am

#51 order up a “sidecar”

Two parts brandy or Cognac
One part Cointreau
One part lemon juice

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CaptJackSparrow Says:
March 5th, 2009 at 11:51 am

So let me ask everyone this….
If GM files Chap whatever, what happens to the $XXX.xxx Billions that was “LOANED” to them?

Just curious………..back to my Kahlua & Coffee…….

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Gary Says:
March 5th, 2009 at 11:56 am

Just what we need. More doom and gloom stories to make people latch onto their money even more.

When will it end? People actually need to get off their asses and actually work building physical things (rather than continuing down the complete B.S. touchy-feely “service-oriented” economy) to clear the financial clog, rather than just cry “woe is me” about it.

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noel park Says:
March 5th, 2009 at 11:57 am

#17 Rashiid Amul and others:

Amen. Thanks.

I disagree quite strongly with statik from time to time – you may have noticed, LOL. On the other hand, I respect and appreciate his comments about 95% of the time. I do consider him to be a friend, along with so many others of you all, and a great resource for GM-Volt.com.

There are plenty of other people who post here who annoy me a lot more than he does. It has been valuable for me to learn to conserve my time and energy and not to get into endless debates with people whose minds I have 0.0% chance of changing.

I have learned to really try in life to take the good which almost every person has to offer, and to ignore that which I find to be the bad. And to try to encourace those with whom I agree, rather than to fight with those with whom I disagree. Although I do make an exception for statik fro time to time, hehehe. Maybe it’s what my mother used to call a backhanded compliment.

Anyway, I commented on the last thread about the huge number of comments thereupon, and the strong message therein for GM and our political “leaders”. So well done to all of you, and especially to the good Dr. Dennis.

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Luke Says:
March 5th, 2009 at 12:02 pm

Joe @ 10,

bdnk, I have to hand it to you. I like a man that says it like it is. There is definitely a click that follows statik with his negativity.

s/negativity/analysis/

Statik rarely looks through a rose colored glass, but he does have keen insight into what’s going on. I’d love to know what he does for a living. My guess: Canadian mutual fund manager?

Anyway, I often search these threads for “statik”, “nasaman”, and occasionally other folks who have been unusually insightful in the past. Then I read those. And if I have time, I read the comments that they’re responding to, and then maybe I read the rest of the comments. When I have real work to do, I’ve got to make my blog-reading/coffee-drinking time pay off!

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David Says:
March 5th, 2009 at 12:02 pm

I find it ironic that the man now most responsible for the continued economic slide via his horendous economic policy is depicted immediately under this article. We all get what we voted for…

oops, it is a cycling ad, but I bet you know who I am talking about.

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Chuck Brown Says:
March 5th, 2009 at 12:03 pm

“Just what we need. More doom and gloom stories to make people latch onto their money even more.”

The problem is, that is exactly what people need to do, and what they should have been doing all along. People were living way beyond there means, buying houses and cars on credit they couldn’t afford. America is finally going back to actually saving money, keeping cars longer, not buying too expensive houses. These are all GOOD things. Businesses that were based on rampant consumerism need to readjust, but this is good thing for America IMHO.

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CorvetteGuy Says:
March 5th, 2009 at 12:04 pm

Everyone here is focused on the auto industry (naturally), but the downturn in vehicle sales is everywhere.

Motor Homes, Motorcycles, Boats, Off-Road Vehicles, Luxury Corporate Jets…. You can’t say they are all mis-managed.

It’s a DEPRESSION people! DEE-PRESH-UN…!!!

The only area of the auto industry thriving is the “auto parts stores”.
Time to buy stock in Kragen and Auto Zone.

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noel park Says:
March 5th, 2009 at 12:04 pm

BTW, the new (I think, I read it at the dentist’s office last night) Road & Track has a really interesting comparison test on high preformance small cars. If memory serves, the list included the Honda Civic si, the Volks GTI, The Mitsu Evo, the Subie WRX, a couple of others, and the Chevy Cobalt SS.

Fastest lap around the Streets of Willow Springs? Cobalt SS! Pretty amazing and impressive to us road racers. It just goes to show what GM engineers can do, when given the chance.

They said that the interior was a little cheesy, compared to the competition, but it sure does go and handle, and it has outstanding brakes. They also said that the ride quality is not too compromised. Check it out.

Nothing like a little ray of sunshine on a very gloomy morning.

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RB Says:
March 5th, 2009 at 12:06 pm

#50 DonC notes
What we have is worldwide excess capacity brought about by incredible manufacturing efficiencies and new auto companies being started, with government backing, in the developing world.
——————————————————————-

This is a good description of what has happened so far. Textbook economics says that what happens now is that those auto companies with the lowest costs will stay in business (and gain volume) as those with higher costs will go out of business. Of course, textbook economics (as the introductory level) does not include government intervention.

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Big Picture Says:
March 5th, 2009 at 12:23 pm

#50 DonC

“What we have is worldwide excess capacity brought about by incredible manufacturing efficiencies and new auto companies being started, with government backing, in the developing world.”

Bingo.

Supply = 90 million
Demand = 60 million

Yeah, baby. Looking good for the weakest players. Capital should flow to places with better prospects. Maybe one is a heavily restructured GM, but in the long run, how can GM compete w/ much-lower cost rivals in a relatively open mkt like the US? Some possibilities: protectionism, in any or all of its various forms (tariffs, subsidies, “buy American” marketing, etc.), or becoming a low cost producer themselves (Chindian), or develop a defensible niche, e.g., out-Volt the other guys.

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Schmeltz Says:
March 5th, 2009 at 12:25 pm

To Statik or anyone else who wants to weigh in on this….I found an article on CNBC this morning by Phil Lebeau, their Auto sector blogger. Phil’s article counters what many here including myself are saying, in that he feels the gov’t. will continue to loan GM money, and not allow it to go through a bankruptcy filing of any sort. Do you think he is right? Here’s his column:

——————————————————————————-

GM Auditors Raise The Specter Of Chapter 11
Behind the Wheel – Phil Lebeau

Admit it.

When you see the headlines of GM warning it could be forced into chapter 7 bankruptcy and liquidate, you likely have two reactions.

First, you say “Duh! These guys have been hanging on by a thread, of course they could go under.”

Second, you’re probably thinking, “There’s no way the Federal government will let this company sink.”

Both reactions are right on the mark. Which is why, strange as it sounds, GM’s annual report doesn’t really change anything. It doesn’t make it more or less likely the Treasury Department will lend another round of billions to GM. And it doesn’t change the cutbacks in production and jobs at the auto maker.

Why?

Because this report was a snapshot of GM at the end of last year, when the company made it very clear it was days from bankruptcy if it didn’t get a lifeline from Washington. We knew back then that GM was truly on the edge. The company said on February 17th its cash level at the end of December was $11-14 Billion, the bare minimum needed to run the company day to day. In fact, in it’s annual report, GM says, “In the fourth quarter of 2008, our available liquidity dropped below the level necessary to operate our businesses.” So this report essentially confirms what we’ve known, what Wall Street has known, and what President Obama’s Auto Task Force has known for some time.

That’s the reason why many believe the Federal government will not let GM go under. It has already sunk $13.4 Billion into the troubled auto maker. That money is not just a loan, it’s the government’s unspoken word that it will keep GM from imploding. Oh sure, we will hear the President and political leaders in Washington issue public warnings that if GM can not get it’s act together, it won’t be propped up by the Treasury Department. Tough talk aside, the reality is that Washington has committed to restructuring GM outside of bankruptcy court with Federal loans. It has little choice but to do so.

The banks don’t have enough money, or for that matter the gumption, to provide the billions in debtor in possession (DIP) financing needed for a chapter eleven bankruptcy. Without that DIP financing GM would have to go into a Chapter 7 liquidation which could trigger other bankruptcies in the auto industry, cause more jobs to be lost, and in general create a disastrous situation for an economy already in a recession. The bottom line: If Washington were to throw GM into bankruptcy right now, it would be running the risk of blowing an even bigger hole in the economy.

So why is this warning from GM getting so much attention?

It’s because the company has spelled out the sobering reality of just how close it is to falling apart. Any time a company the size of GM talks about liquidating, we sit up and take note. For months, we’ve heard the same thing from GM executives, analysts, consultants and anyone either in or close to the company. They weren’t crying wolf. As GM burned through almost $85 million a day in the fourth quarter the auto maker was sliding closer and closer to bankruptcy. Now we see just how close it is.

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CredGone Says:
March 5th, 2009 at 12:26 pm

LYLE:

I think you should consider the rather sad effect your alarmist headlines are having on your web site. Where once you were a staunch positivist – now we are treated to virtual sophistry. The cyber world is well aware of tired, old alarmist headlines and resultant loss of credibility for their authors. Once your credibility is gone (as with the global warming alarmists) it will be VERY difficult to get back.

It’s like being addicted to drugs – alarmist headlines appear to attract attention – but the loss of credibility will make that attention a laughing stock. Hopefully, cooler heads will prevail and you can regain some of the productive content this site is known for.

Although not as sensational or dramatic – virtual honesty wins far more minds than does hyperbole. Good luck on your recovery!

“Exaggeration leads the coalition of disbelief.”

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N Riley Says:
March 5th, 2009 at 12:28 pm

#55 Noel Park

I wish I had said it the way you did. A very “positive” comment and I want to thank you for it. I appreciate it as I am sure Statik and Rashiid do. Thank you, again. I will try to be more positive myself and will attempt to belittle our government and politicians as little as possible. Can’t promise the impossible, but will attempt it to some degree.

I really appreciate this site and want to thank Dr. Dennis once again for providing it for us. It is something I look for to every weekday. On Saturdays, Sundays and holidays when I am at home, I don’t always check in to see what is happening, but I spend too much time on it during the weekdays. Thanks, Lyle.

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Luke Says:
March 5th, 2009 at 12:35 pm

Tim @ 28,

It’s not theft when you take from your children or grandchildren, is it?

Would you please provide a free-market solution to the cascading problem of massive unemployment causing massive foreclosures, and the resulting migration of newly-poor people (including all of the small-businesses in the communities that depended on money spent by the auto-workers) to the rest of the country? Even Obama-voting former-libertarian energy-conserving vegetarian-compatible bearded hippies like myself would love one.

“That’s life” and “they shouldn’t have depended on that particular golden goose” aren’t answers, unless we all happen to live so far from our neighbors that the actions of our neighbors do not affect us. This is the situation we’re in now. If you’d like some data to work with, you can see what happened to places like Rome New York or Michigan’s UP after the military base closures in the 1990s. I went to both places for work in 2000-2002. They seemed to be adapting after a few years — but long-term residents were still complaining bitterly about all of the money they’d lost by declining real-estate values (my friend’s boss in Rome literally couldn’t afford to move), and the impact on the small-business community was still being worked out.

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statik Says:
March 5th, 2009 at 12:45 pm

#55 noel park said:

I disagree quite strongly with statik from time to time – you may have noticed, LOL. On the other hand, I respect and appreciate his comments about 95% of the time. I do consider him to be a friend, along with so many others of you all, and a great resource for GM-Volt.com…There are plenty of other people who post here who annoy me a lot more than he does.
————-
Thanks…I think. (=
=============================
=============================
#50 DonC said:

Statik’s arguments are generally GM centric, which until late last year were appropriate but now seem somewhat misplaced. It’s not so much that the comments are negative, it’s that they are too specifically negative. When every major automaker in the world is in the process of going out of business absent government action it seems pointless to single out any one manufacturer in particular.
———————–
Well, what can I say? I am what I am, lol. I do have opinions about other automakers (and the wider economy)…but unless referenced directly by the thread, it feels like a hijack to talk about them, I am trying to cut down on misdirection in the comments section…although maybe unsuccessfully (it is a GM based forum after all).

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noel park Says:
March 5th, 2009 at 12:45 pm

#62 Big Picture:

“defensible niche” – Bingo! Germany’s auto industry succeeds on the world stage with labor and “legacy” costs which have to be as high as Detroit’s. Well, I dunno about health care, but never mind. Look at their products. They are clearly “defensible”. If you make something which the consumer finds desirable enough, you can charge enough to make money. Ergo, the $25K+ Mini Coopers I mentioned recently.

Likewise Japan. I don”t believe that their home island labor costs are any cheaper either, let alone shipping.

#64 CredGone:

172 comments on the last thread.

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Timaaayyy!!! Says:
March 5th, 2009 at 12:48 pm

A brief break in the doom cloud:

While I was thinking of a post-prepacman bk name for GM, I got to thinking of some of the worst company names of all time:

IBM
(Merrill) Lynch
Paine (Webber)
Datsun change to Nissan (oh, much better)
Coke
Microsoft (oh, you stud)
Marvin Gaye

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stas peterson Says:
March 5th, 2009 at 12:53 pm

Statik,

I’m still waiting for you to discuss the massive leverage rule in corporate Japan, that makes the japanese auto industry so precarious. I am also realistic. Japan’s mighty car companies are teetering on the Abyss as well. I wish you would offer your opinions on that, as well.

When the governments of all the automakers worldwide are subsidizing and trying to take their industries through the bad times, it makes it all the clearer that an industry wide meltdown is more than than a single firm’s mismanagement.

Prepacked bankruptcy for the auto firms, or more loans, may be the way the government must go, but the spreading appeals by all the world’s automakers make that much more inevitable, rather than less.

As far as the un-optimistic Clueless One is concerned, he is trying to cover his future failures by condemning the present. That is a hallowed political ploy. Dumping 2 trillion dollars of liquidty into the economy cannot but generate an economic rise, temporarily.

But that has the seeds of a future Inflationary episode that makes the Carter inflation look tame in comparison, is inevitable in 18-24 months.

Combine that with the massive tax increases and increasing regulations, he is stupidly installing, to create uneconomic inefficiencies, will also counteract any recovery.

We have already pointed out that raising electric prices from 75 cents per gallon equivalent to $7.50 cents per gallon equivalent, can kill the momentum for electric cars.

But the gentleman is hell bent on such a course, apparently, to mollify the NIMBY Reid in Nevada, and the loopy greens.

It is really too bad that such a doom-saying, unqualified, glad hander whose minimal competency seems to be running for office, or registering gravestone names to vote, is now our President. His incompetence will set back qualified black office holders for a generation too, I fear.

But I’m optimistic. The country can bear any incompetent for 4 years; it has done so many times before….

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Look in the second half of the textbook. Says:
March 5th, 2009 at 12:54 pm

#61 RB

Yes, textbooks at the intro level do include that. It’s usually in the second half of the book.

Look up “market failure.” It’s what you do in the case of those.

Or do you not consider credit frozen globally to be a market failure?

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statik Says:
March 5th, 2009 at 12:58 pm

#56 Luke said:

Statik rarely looks through a rose colored glass, but he does have keen insight into what’s going on. I’d love to know what he does for a living. My guess: Canadian mutual fund manager?
——————————
I’ve mentioned it before…but nothing so glamourous (note Canadian ‘U’) as managing anything other than my own business. I have a clothing manufacturing business that deals specifically with the larger corporate clientele.

I honest don’t care for it that much (which seems hypocritical), but out of university it is what I seemed to do well…so thats what I did. Now that it is successful I don’t ‘work it’ too much, I spend most of my time watching/trading the market, moderating a finance ‘club’, and hanging out with my son.

I actually intended to take advantage of my university background, and took some courses to get into the finance field, but my business took off in a hurry and I found out that I really didn’t want to manage anyone else’s money (or be responsible for it)…trying to look after my own interests is plenty stress enough, lol.

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CDAVIS Says:
March 5th, 2009 at 1:00 pm

______________________________________________________
I’m Optimistic.

It’s a nice clear crisp day here in sunny Florida.

The birds are happy and signing outside my office window.

I went to a high-end restaurant last night that was packed. The same restaurant in November was almost deserted.

Two friends of mine that got laid off from their jobs last year have been recently hired by other companies.

My own business has improved this quarter compared to last quarter. We may have to hire more emmployees!

The production VOLT will roll off the assembly line and be available for sale in 634 days helping feed momentum towards an emerging EV/EREV revolution.

The Oboma administration has allowed itself to be put in a position that they can’t allow GM to die on Obama’s watch. Therefore GM will emerge from their current financial predicament either as a nationalized/government car maker or a leaner and competitive private company. I hope GM ends up taking the path of lean and competitive because I’d like to see GM selling cars beyond another 8 years.
______________________________________________________
Electric Cars + Nuclear Power = American Energy Independence!
______________________________________________________

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Chuck Brown Says:
March 5th, 2009 at 1:04 pm

What can we do?

Signing this might be a good start:

http://ga1.org/campaign/beyond_bailouts

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Rashiid Amul Says:
March 5th, 2009 at 1:09 pm

Gary #54 says,
People actually need to get off their asses and actually work building physical things (rather than continuing down the complete B.S. touchy-feely “service-oriented” economy) to clear the financial clog, rather than just cry “woe is me” about it.

———
Gary, unfortunately this approach won’t work now.
Not too many people left who can afford to buy the stuff you want people to make.

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Frank D Says:
March 5th, 2009 at 1:11 pm

It’s time to wipe the slate clean and emerge as the “Voltec” brand.

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Nelson Says:
March 5th, 2009 at 1:11 pm

“ shell-shocked consumers fearful for their jobs, the value of their homes, and stock market assets are wary of making the sizable discretionary purchases of new vehicles.”

It disgusts me to be put in a generalized statement like the one above. I am 45 years old my home is paid off, and I have enough cash to buy two new vehicles. I just won’t buy old technology knowing very well that I want to get a plug-in vehicle with a lithium battery. I don’t care if it’s a plug-in hybrid or an EREV.

NPNS! If the automotive industry only wants to make excuses why people aren’t buying their old tech cars, then they all deserve to go belly up.

NPNS!
NPNS!
NPNS!

Three strikes.

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CaptJackSparrow Says:
March 5th, 2009 at 1:16 pm

All this economic gloom and doom is just a “Reset” or Ctrl+Alt+Del to the whole thing.
Shlt like this will happen when many people do things wrong/out of their reach.

Mortgages: People purchased beyond their means = Foreclosure
“Reset” or Ctrl+Alt+Del to the whole thing.

Financial industry: Banks insure these bad loans = Bank Failure
“Reset” or Ctrl+Alt+Del to the whole thing.

Auto industry bets on high profit margin large vehicles: People stop buying large SUV type vehicles and look to gas sippers.
“Reset” or Ctrl+Alt+Del to the whole thing.

People now start to save their money beacuse of bad finacial markets. This is the point we start over. People should’ve always been saving “For a rainy day” but many spend spend spend and many more tell you to spend spend spend to “keep the economy healthy” but don’t care about yours. Well, at some point your economy will run out so the people that tell you to spend spend spend to keep the economy healthy are the cause.

Now that’s jus IMHO.

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D. Says:
March 5th, 2009 at 1:20 pm

might want to rethink our healthcare system-with twice the cost, half the quality of similar industrial nations- for bringing our manufacturing costs down, though some will cry foul. As someone said a coupla days back, “(we) americans have waste in our bloodlines.” Funny, and true.

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Snowdall Says:
March 5th, 2009 at 1:21 pm

What disappoints me in this discussion in the media is how they categorize “The Detroit 3″ as the “US auto industry”. They completely paint over all the new alternative energy start ups that have popped up over the last several years. Think about it …. we haven’t had this many car companies in the US since Nash Ramblers and Studebakers wandered the streets.

And with that in mind, I think it might be time to just let GM and Chrysler go under and instead prop up Miles EV, or Telsa, or Phoenix Motors, or Aptera, etc.. Yes, I want a Volt as badly as the next guy, but if we have to bailout Escalades to get it … then perhaps it’s time to put our money elsewhere.

Snowdall

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LauraM Says:
March 5th, 2009 at 1:26 pm

#66 Luke

Yes. People are suffering. I know that. I would love to find a solution. But that doesn’t mean you can spend money that doesn’t exist.

The US government is 10 trillion dollars in debt. Foreigners own half of that, which means they can force the US government to act in aways not in our best interest. And looking at this new budget realistically, we’re planning a trillion dollar deficit even after a theoretical economic recovery. Mexico’s complaining about our debt. China’s demanding assurances. Enough already.

You’re absolutely right that we need deficit spending right now. But my solution would be to spend the money on investment rather than social welfare programs. That means a real infrastructure stimulus instead of one where infrastructure is 10 cents on the dollar. That means spending on science and research. That means spending on high speed trains which will reduce energy consumption than a million volts. That translates into jobs, and it would pay a dividend in the future.

Social welfare programs are appealing, but once that money is spent, it’s gone. And it’s really tough to cut them once they’ve already been established. Which means a permanent increase in government spending

I actually think that supporting GM and Ford could be an investment. The US needs an automotive industry. But only if they restructure completely, and the unions take permanent significant cuts. Which they may or may not be able to take.

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Cautious Fan Says:
March 5th, 2009 at 1:31 pm

Statik

Your GE has been getting killed lately! 20% drop in the last 4 days. Maybe now you’ve lost as much as I have, though I hope not.

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Pinko Comm Symp Says:
March 5th, 2009 at 1:33 pm

Banks on welfare.
Automakers on welfare.
Ha ha America, your free market system has led you to the door of socialism

We’ve been waiting for you

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statik Says:
March 5th, 2009 at 1:49 pm

#70 stas peterson said:

Statik,

I’m still waiting for you to discuss the massive leverage rule in corporate Japan, that makes the japanese auto industry so precariouse. I am also realistic. Japan’s mighty car companies are teetering on the Abyss as well. I wish you would offer your opinions on that, as well.

================

I know your waiting, lol.

I wouldn’t mind touching on a little something about Japanese automakers. Everyone knows the auto business is…well, terrible. I think most would also agree that the Japanese automakers are the strongest force in the business for the past decade (and now).

As DonC and more than a few others like to mention from time to time, they are not doing so well either now…market conditions have caught up to them. It may not be possible for anyone other than a small lean and mean, or niche operation to eek out a profit now (I’m thinking Subaru here as a example–rising sales, while not cutting prices)…this is closer to where I’d like to see GM, no longer all things to all people.

I think it is important to not confuse Toyota/Honda finally dropping a few billion in their next report with being unsuccessful, or painting GM’s (or Chrysler’s) losses as, “oh well, it is just the market, everyone is doing badly, so we should keep them alive” GM and Chrysler where on the fast track to C11 long before this ‘recession/depression’ started… they were tanking when the car business was at its zenith.

Japan has had some distinct advantages. They didn’t overpay retiree benefits, the gov’t pays a good chunk of pensions/health care, etc.

However, part of Japan’s losses recently have really been exacerbated by the ridiculous strength of the yen starting in late ‘07, going right up to the first of this year. Which Lyle as been keen to point out what a car at XXX yen in Japan would convert to if priced in the US. Conversely, as bad as the domestic numbers are…they could have been a lot worse had it not been for good currency conversions.

Now here is where it gets REALLY yucky for our domestic autos that sell internationally (so not you Chrysler, lol). That trend is reversing, big time. The fear is so rampant in the market, or the rest of the world (looking at you EU) has come down so much, that even though the US has the money printing press fired up and is throwing out money like candy at a Easter parade, people are liking the US greenback.

Lets use the Prius as a example (because it is popular to talk about)
MSRP $22,000….built in Japan

July 2007 $22,000 USD = 2,640,000 yen
Dec 2007 $22,000 USD = 2,420,000 yen
Dec 2008 $22,000 USD = 1,936,000 yen

Thats a 30% haircut, easy to see why Japanese automakers want a footprint of some size in the US to mitigate this somwhat. They are getting the tar kicked out of product they export to the rest of the world.

Now in the past couple months, with the world rocking, the dollar is doing a uber-rally, so we find this occuring to Japanese margins.

Today $22,000 USD = 2,150,000 yen
(we have seen a 13% swing since December 17th)

What does this new reality mean to GM? Lets use a Aveo @ 7900 euros

1 year ago 7900 euros = $12,500 USD
Today 7,900 euros = $9,954

/feel free to extrapolate your own conclusions

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JEC Says:
March 5th, 2009 at 1:51 pm

Pulled head out sand….Read the first few posts…Re-inserting head back into sand.

“It’s to hot today, my friends!”

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N Riley Says:
March 5th, 2009 at 1:56 pm

#81 LauraM

“But my solution would be to spend the money on investment rather than social welfare programs.”
———————————–

But you forget, Laura, that investment in businesses don’t vote. People receiving the social welfare programs do vote and vote heavily for only one party. So, why would any congress person cut off social welfare programs if they could expand them and get more votes to stay in power longer? Care about the economy? No, these politicians don’t really care about the economy. They only care about the people who they must convince to vote for them. but they don’t really care about them either. If they did they would want to build them up, see that they get the best education, get qualified to hold good jobs here in the U.S. and not let those jobs be sent overseas. Building people up and educating them are dangerous to getting votes to keep your agenda going. So, that will not happen. More of the same. Just more so as the year progresses. More social welfare spending for businesses, people and political supporters. Mustn’t lose power now, just when changing America is finally in their grasp.

Sorry, I am not very optimistic about government solving our problems.

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charlie h Says:
March 5th, 2009 at 2:01 pm

Statik,

Are you holding GE? Do you think that a dividend cut is likely? That it is already in the price of the stock? What yield to you expect if and when they do drop the bomb?

#18, Shawn Marshall: “Charlie H. Why did you not catch the ‘likelihood ‘ mistake, language man? You’re not playing favorites, are you?”

Reading forums like this and correcting errors would be a Sisyphean task. Most of us just ignore the little mistakes and focus on the content. Statik usually provides pretty good content.

In the case at hand, bdnk posted something that was, to say the least, mean-spirited. Joe chimed in for him. The value of his post was very low in terms of imparting useful information to anyone. The use of “click” for “clique” caught my eye, which is beyond a simple spelling error or typo, and suggests a complete failure to understand the word.

These factors converged and the effect was to rouse Mr. Language Person from his slumber and offer a correction. This way, some value derives from Joe’s post.

—

And on to something else that I haven’t seen discussed so far today…

A Chapter 11 filing will test the Volt business plan. If it doesn’t look like it will make money, that will be the end. A post-C-11 GM won’t have money or time for frippery. They will only build things that have actual profit margins.

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MarkinWI Says:
March 5th, 2009 at 2:03 pm

Laura@#81 – I generally agree, but I don’t see the stimulus as having the level of “social welfare programs” that you seem to. About 40% was allocated to tax cuts. Unnecessary and ineffective, but they were part of the political solution. I’d have preferred more on infrastructure and energy investments instead.

The biggest “social welfare” pieces were for health-care and longer unemployment. Both will help keep families in their homes (at least 1/2 of US bankruptcies arise out of health care issues). I found the Republican attack on the unemployment piece to be a bit disingenuous. I don’t know why you couldn’t take the increased federal money now for extended UC, and just put a sunset provision in the additional provisions that you had to put in to qualify for it.

Don C@#50 – I agree.

Re yesterday: As a general proposition, I agree that if you are on the low-end of the income-tax spectrum you’re not looking at a Gen1 Volt. However, income is not wealth. There may be some who have wealth, but turn very little of it into taxable income. If they felt like cashing in some of his investments to buy a Volt they could, and at 15% for long-term capital gains, they would probably not need to generate $7500 in taxes to do it. So I addressed that end of the spectrum, because I’m not sure that it doesn’t exist.

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N Riley Says:
March 5th, 2009 at 2:07 pm

#81 LauraM

I was trying to add some positive feedback to my response to your comment when my edit time ran out. You made some good points and I don’t want to sound too pessimistic as I may have in my first response to you. The pessimism was not directed towards you or what you said. I think you said some very good things. Thank you.

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statik Says:
March 5th, 2009 at 2:18 pm

#82 cautious fan:

Statik

Your GE has been getting killed lately! 20% drop in the last 4 days. Maybe now you’ve lost as much as I have, though I hope not.
=======================

Oh man, I dipped my toes back in the water and learned a lesson in a hurry. I was getting fidgety not trading, so I moved about 2% back into the market, mostly in RY, but some GE too. (around a 65-35 split)

The RY (Royal Bank of Canada) I got at $23.75 and instantly dropped to about $20.50, lol. Fortunately, it rallied on great earnings and I got the heck out in the mid 24s.

GE…not so much. Cost me around $11. Immelt (CEO) promptly goes on tv and says the dividend is secure…then chops it a couple days later. Have some credibility issues here obviously. Now they are worried about the rating and GE Capital’s debt burden…trading at $7 now, and threatening to go a lot lower.

I was going to sell it a couple times, (and I still should sell it like…right now) but I’m leaving it active just so I have to see it whenever I get the urge to do something impulsive. I’m still not sure why I did it after being down/short the market for well over a year. (I had a rationalization at the time, lol).

To answer you question though, it wasn’t a lot on a percentage basis…less than a percent, like 7/10ths…but a 40% haircut makes it about 4/10ths now.

/et le ouche….and lesson learned (I hope)

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ccombs Says:
March 5th, 2009 at 2:20 pm

I never thought Chapter 11 would work, but now I can’t see any other alternative. I am beginning to believe that GM executives are now warming up to the idea, as it will allow them to really cut the fat in a way that even the current viability plan won’t let them. I wish C11 meant goodbye UAW, but I highly doubt that.

#84 statik- I’m an enginerd, so all this financial jibber-jabber just reminds me of my woeful financial illiteracy (even though I took a finance class and some economics, it all still seems like a mystery sometimes- especially all that crazy subprime mortgage repackaging crap). Nonetheless, what you’re saying sure sounds like good stuff to me. I wish more people were willing to say that it all might get worse before it gets better. Having followed this site for a while, I’m beginning to think you’ve been right all along…

In any event, economics in 2009 once again truly is “the dismal *cough* science *cough*”. The only worse thing I can think of is accounting. Thus why I avoid hanging out with business-folk. I thought this site would allow me to escape into an enginerd paradise- I was wrong!

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N Riley Says:
March 5th, 2009 at 2:24 pm

85 JEC

I wish I had done the same thing, my friend. Funny and had me laughing for awhile. Good luck to you.

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CaptJackSparrow Says:
March 5th, 2009 at 2:29 pm

@MarkinWI 88
“The biggest “social welfare” pieces were for health-care and longer unemployment. ”

Dude, they took the cap off of welfare. When you say “longer welfare” you really mean unlimitted. There is no cap so the bottle is wide open forewever………

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statik Says:
March 5th, 2009 at 2:31 pm

#87 charlie h said:

Statik,

Are you holding GE? Do you think that a dividend cut is likely? That it is already in the price of the stock? What yield to you expect if and when they do drop the bomb?
=================================
Well, I guess by now you can tell that I am. The cut is done, lol. Moved it from .31 to .10 per share, so the yield goes to about 4.5%.

The issue wasn’t actually the cut itself, the street wanted the cut. However, there is no confidence in the CEO, and with the widening financial crisis GE Capital is a huge liability on the books, so much so that it is overshadowing all the things GE does right…it will be worse still when GE loses that AAA rating.

It is a total dog, I made a huge mistake picking up even a single share and I am only holding at all right now to teach myself a lesson…it could be years before it rebounds to where it was even a couple weeks ago. I would consider myself the luckiest person alive to get out of it even this year. The good news it is all out of my system now (I hope) and I’ll be happy with boring old 4-6% returns for the near future.
————————————–
————————————–
#91 ccombs said:

In any event, economics in 2009 once again truly is “the dismal *cough* science *cough*”. The only worse thing I can think of is accounting. Thus why I avoid hanging out with business-folk. I thought this site would allow me to escape into an enginerd paradise- I was wrong!
——
Sorry about that…I’ll try to tone it down some for you, lol. Honesty, this seems to be all there is right now. Could just be me…but it seems like the Volt project (and everything else) stopped mid-november and there hasn’t been any new developments in reality to talk about since.

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Dan Petit Says:
March 5th, 2009 at 2:35 pm

All the report hints at is who doesn’t get paid or who doesn’t keep their jobs at what rate of obligation-dissolution (the rate of cutting inefficiencies), either by GM (or other OEM’s) or by Judge(s), via a reorganization filing or no.
But we all need to have operating vehicles. We all must go to work or to the grocery store. Our current vehicles are still wearing out (although at a slightly slower rate due to reduced mileages).
The devastating consequences that you might be in the process of paying for now (and not yet realize it since “Check Engine” lights only illuminate 10 percent of the time when expensive damages from neglect are in process), is your lack of on-time, on-mileage scheduled maintenance.
Advisory: Now more than ever, do not neglect to read and follow your maintenance schedules. And worse, do not trust that 3 year old battery to have enough surge-protection capacity to protect your computers and sub-processors, and very expensive automatic transmissions, (especially if you can visually see that there are any traces of liquid acid stains on the top of it or white weeping acid trails down the side of it!!!). (Never allow anyone to put grease between/on top of the battery post/side terminal and the clamp/cable, or immediate damage to the accelerator pedal position transducer will result on many vehicles, and, make sure no-one has already done that!!).
But your vehicle will certainly get to the point where it is no longer cost-efficient to service. This is why I would not be opposed at all with a restructuring (which strips away inefficiencies). Dragging out the process of healthy change can cause more catastrophic loss than a reorganization filing in the first place. The wisdom in having judges do that is for one reason. Fairness.
As far as “predicting” anything is concerned, if it does not immediately help someone prevent preventable damages on a vehicle or in any other situation, and you can’t prove your advice prevents direct losses, then it seems to me it is just vanity.
Dan Petit Austin TX.

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The Grump Says:
March 5th, 2009 at 2:43 pm

#54 Gary – Remember Ross Perot and his “big sucking sound” of all the manufacturing jobs going overseas? Well, we’ve been sucked dry. All the unemployed people from those manufacturing jobs are competing for the remaining jobs here, which lowers labor costs – more people competing for fewer jobs = “you can forget about a raise this year. You’re lucky to have this job”.

And our standard of living goes lower and lower as we’re asked to compete with the world – Pedro, making $1.00 a day in Mexico, Ahud in India making the same amount, and a nameless political prisoner in China, who works or else his whole family will be killed. With competition like that, Americans will be living in shanty-towns and burning old pallet wood for heat. Not a pretty picture.

Our standard of living has fallen so low already, the housing market bubble could not be sustained, so it collapsed. People are too afriad to buy cars right now, and rightly so. Take the rose-colored glasses off folks, the economy will get even uglier from here, unless we get our manufacturing jobs back.

RULE 1 – IF YOU SELL IT HERE, MAKE IT HERE. On US soil, using US labor. Sure, it’s not free trade – it’s fair trade. Honda makes cars in the US. Now we need to make everything else here, from clothes to TV’s, to microchips, to notebooks, to steel, and yes, to lithium-ion batteries.

Or we can watch the US get poorer, and poorer. Pretty soon, a whole US village will have to pool resources to buy a single Chinese truck, just to take the village’s crops to market. The middle class will vanish – only the wealthy USSA ruling Party, and the poor, will exist. Most cities will be abandoned as being too expensive for the ruling Party to afford. Health care would be reduced to a few cheap off the shelf drugs, based on availability – sometimes.

Your choice – more “free” trade, or demand Congress enact Fair Trade. (BTW, saving the future of the US is not “protectionist”, it’s just sane)

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N Riley Says:
March 5th, 2009 at 2:44 pm

#94 Statik

GE’s CEO is certainly one that should resign if any CEO should. Problem is that after running a great corporation into the ground, he will resign or get fired and take home a multi-million dollar package. If Obama and congress wants to do something about corporate abuse they ought to stop this practice. But they won’t. Just look at the juicy retirement (forced by not being re-elected or resigning or not running again) our congress gets.

Too bad that you bought into GE. I won’t even buy any of their products anymore and I used to swear by them, so to speak.

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Alex S Says:
March 5th, 2009 at 2:46 pm

I’m guessing a lot of people aren’t buying cars because they rather wait for the electric ones.

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noel park Says:
March 5th, 2009 at 3:10 pm

#96 The Grump:

Well, I don’t always agree with you either, but you nailed it this time.

Thanks.

#98 Alex S:

That’s me!

LJGTVWOTR!! NPNS! DBNGCMEMEV

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LauraM Says:
March 5th, 2009 at 3:29 pm

#84 Statik

I would actually argue that the yen has been artificially low for the past ten years, and Toyota and Honda have benefited from this. GM, Ford, and Chrysler have been hurt by this.

In a free market, currency values are supposed to even out trade deficits. It hasn’t worked out that way in practice for two reasons. First, the dollar’s status as the world’s reserve currency keeps it artificially high against every currency. Second, Japan, in particular, has had zero interest rates for the past ten years.

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LauraM Says:
March 5th, 2009 at 3:36 pm

#86, 89 N Riley

I actually agree with you that our government is disfunctional. I was posting about what I’d like to see, not what I expect to happen.

#88 MarkinWI

It’s very difficult to “cut” unemployment benefits once they’ve already been established. It’s doable, but it hardly ever happens. Sunset provision or no, it will likely be extended ad infinitum.

It’s the same way with the Bush tax cuts. They had an expiration date. But by letting them expire, people are up in arms about a tax increase. Because that’s how they see it.

Also, yes, that unemployment compensation will keep people in their homes. And people will keep their health care. But these things aren’t free. And we flat out don’t have the money. There are other ways of doing things that are much more effective, and more sustainable in the long run.

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Gary Says:
March 5th, 2009 at 3:41 pm

GM and the U.S. economy wouldn’t be having these fears if people actually bought their vehicles. Come on, they’re not that bad. Knobs and doors do not fall off them.

An opinionated co-worker who lives to bash domestics commented about how she saw a Malibu with smoke coming from its wheel when going down the road. A saw a similarly aged Civic a day later stopped at the side with the driver looking at blue smoke coming from under the opened hood. I’m sure that somebody is going to disagree.

If it isn’t obvious to so many people that living off credit cards is unsustainable, then I guess that the concept of trade deficits is completely undeciperable to those same people as well. And for those who say that GM builds cars in Mexico and Korea, remember that the imports don’t build all their cars in America, either.

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jeffhre Says:
March 5th, 2009 at 3:48 pm

N Riley 31

Yeah I feel the same way every day. Then I go over it in my mind once again. The world really is interconnected. First I think D- – - – the worst of all is AIG, theyre not even a bank they’re an insurance company! Then I remember if AIG goes, because of their impossible (RETARDED) business model and their utter lack of the ability to judge risk, then Western European and Asan banking centers will collapse too. Because AIG hedged those losses and of course their losses are massive. If they go then Eastern Europe collapses into a starving heap and look who will be first on the hook for foreign aid.Then we will lose the confidence of Asian and Persian Gulf bankers in our ability to support the dollar. Then we lose the ability to create government dollars out of thin air because no one will feel T bills are the safe and risk free investment of choice. Just letting the market work then would cause us to lose our financial standing in the world. Yet, every day I still say I hate this socialist stuff.

Maybe when the worlds economies do eventually recover, private invstors will find a use and therefore price for the now toxic investments and the taxpayers will be paid back… So maybe I would hate shanty towns and mile long soup kitchen lines in the most industrialized countries worse than all the socialism stuff. I think that for too long the solution to letting the markets work for both parties meant “taking the referees off the field”. It’s no wonder government has lost control of the process.

Still I’d like to see a little more discrimination and choice with decisions on taxpayer money. But I figure a democracy is about the most messy way possible to allocate economic rescues. At this point none of it’s fair iand it’s exposing a slew of moral hazard but I have to keep in mind that it’s to save the whole economy, even if it’s sloppy because the most connected parties (Eg. Wall Street) get special treatment.

Rambling completed. Regarding this thread GM bondholders have been spoiled by their uncle Sam to think that they will always be saved. If they don’t budge GM crumbles. GM is in chapter G with T/DIP financing!

I apologize for spelling and grammer issues it is a rant after all : )

(Quote)
jeffhre Says:
March 5th, 2009 at 4:07 pm

Chuck Brown 58

I’m tired of saving money year after year. Now that prices are down and lines are short I’m going to get out and look at stuff. Went on a short trip last week for the first time in years. Mid week discounts are outrageous! Palm Springs was gorgeous. Despite the gloom, take the time to have a great weekend everyone!

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Victor Says:
March 5th, 2009 at 4:07 pm

GM’s CEO Wagner is play a very dangeruos game of chicken with the UAW, Bond Holders and the Government just to see who blinks first.

Face it boys and girls, GM is TOAST. Pass the butter!

Lutz knew the gig is up and desided to get out while the getting is good. I am sure his compensation package is a sight to be seen. His parachute is not only golden, but it is also laced together with the tears of the children of both blue collar and white collar GM employees and tax payers of this nation.

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jeffhre Says:
March 5th, 2009 at 4:11 pm

The Grump 96

Economists say that the US manufactures more than any other country in the world. Weird huh?

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CaptJackSparrow Says:
March 5th, 2009 at 4:50 pm

@ Alex S 98

D@mn right. I ain’t buying anything but either an EREV or a BEV.
First Choice: Volt
Second Choice: Ford Focus BEV or Th!nk City (Whichever comes first)

@Gary 102
“GM and the U.S. economy wouldn’t be having these fears if people actually bought their vehicles. Come on, they’re not that bad. Knobs and doors do not fall off them.”

Contrary to my desire to buy a GM Volt product, the US product, my 2002 Ford Explorer is the biggest piece of shlt I have ever owned. Yeah the Focus BEV is my second choice, but phuk man this Explorer sucks the b@lls off a dead horse.
Transmission died and had to be rebuilt at 112K miles for $3200…
Passenger rear side window busted off it’s rail: $450
Rear AC module failed $850
Master power window switch box failed $87 + shipping
Plastic “Faux” wood panels, clips broke. $5 for epoxy to re-adhere it.
Ignition key cylinder cover busted off. $137 + rekey (don’t remember the cost)
Rear E-Brake shoes, actually the asbestos pads, busted off the bracket while driving causing hard pounding in the inside rotor cavity where the E-Brake shoes reside. $129

So don’t tell me the perception of “knobs falling off” is not accurate. I will be the first person to tell anyone that my 2002 Ford Explorer is a piece of shlt and yes pieces of it have fallen off or broke! And to all you “buy american” out there, why don’t you come buy my Explorer if you think it will help the economy.
And yes it had all it’s maint done but most of what I mentioned is NOT part of any maintenance is it?

(Quote)
kent beuchert Says:
March 5th, 2009 at 4:53 pm

Who knows? Will Obama’s capture by the UAW be stronger than his desire to see an alive and kicking US auto industry? If he caters again to the unions, the companies are as good as gone.

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Nostradamus Says:
March 5th, 2009 at 5:15 pm

GM has been burning money for months and months.
Close down your factories NOW !!!
Lock the door and send everyone home!!!
Lawsuits will follow, but who cares, they will be tied up in the courts for YEARS, meanwhile, you can turn a profit.
It really is this simple.
Fools are running this company. I tell you FOOLS.
Quit basing your entire existence on Obama handouts, that is NOT a business plan.

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DonC Says:
March 5th, 2009 at 5:27 pm

#63 Schmeltz says “I found an article on CNBC this morning by Phil Lebeau,”

I think Phil LeBeau knows what he is talking about. I don’t think the Obama Administration is staffing up to pull the plug.

#84 statik says “As DonC and more than a few others like to mention from time to time, they are not doing so well either now…market conditions have caught up to them.”

So true. I do think that Toyota is in very bad shape. Not the crisis shape that GM is in, but surprisingly close. It’s having trouble borrowing money and with only about $18B in cash reserves and a very high burn rate it will probably go bankrupt unless the Japanese government bails it out, which it doubtessly will. My guess is that the $2B is just the start.

#97 N. Riley says “GE’s CEO is certainly one that should resign if any CEO should”

Well it turns out that Jack Welch’s great success was 2% management skill and 98% creative accounting. For many years GE Capital always came up with the numbers to meet or exceed quarterly earnings estimate. Now all those profits have evaporated and GE is in really bad shape.

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Biodieseljeep Says:
March 5th, 2009 at 5:29 pm

On a possitive note for investors, Eestor has even more good news about upcoming products, but no demos just yet.

Let’s all put our money with Eestor instead!!!! Waaah hooo we are all going to be rich!!!!

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Electric Vehicle Owner Says:
March 5th, 2009 at 5:42 pm

#107 CaptJackSparrow

My maintenance bill so far for my electric vehicle, both manual recommended and unexpected: $0.

But I’m keeping the manufacturer happy by buying their continually improving performance plug and play after-sale upgrades and blingtastic accessories.

All the service department folks can go into the aftermarket customizing biz, installation and performance tuning of manufacturer (or other) provided products and services and whatever other services the customer doesn’t want to do themselves.

(Quote)
CaptJackSparrow Says:
March 5th, 2009 at 5:48 pm

@Electric Vehicle Owner 112

Totally agree. I’ve been saying that for months….

No Power Windows
No Power Adjust Seats
No Power Side view mirrors
No Power Sunroof (Actually No Sunroof at all)
No Power Door Locks
No Power Trunk lock
No Radio (Remember that fiasco? – Get an iPod)
No Heated Seats
No OnStar!!!

Make the garbage I listed as an “Upgrade” for those who want these creature comforts.

Standard Features:
AC
Heater
Defogger Front/Rear

Back to Basics Boys!

I’ll take my Volt with No Generator, No ICE, ShAkEn not StirreD…

(Quote)
Don Says:
March 5th, 2009 at 6:24 pm

Bankruptcy is inevitable. Goodnight, GM.

>>>I’ll take my Volt with No Generator, No ICE,<<<
You want a car that can only go 40 miles? Even if you remove all that other stuff and use the cost for morebatteries, it won’t be able to go much further.

(Quote)
chevonly Says:
March 5th, 2009 at 6:27 pm

Gee Whiz Comrades why aren’t you guys calling for the resignation of the top brass at Honda and Toyota, they are begging for dollars from the Japaneese government, I think they would be better off getting money from Comrade Senator Shelby in Alabami, THEY ARE ALL TOAST AND WE ARE ALL TOAST GAME OVER. My advice find yourself a 20 or 30 year old GM truck or Ford truck to drive, they run forever if you can find gas, and millions of parts are available in the junkyards all over the Soicialistic Republic of America. Any idiot with basic mechanical skills can keep them running forever. So AIG will end up getting around 200 to 300 billion before they are done of taxpayer money while you guys are bitching about the working class dogs getting 30 billion, its not even your money any more the money is all gone they are printing it out of thin air with nothing to back it up, time to start over with a new group of crooks!!!!!! They can’t be any worse than the one’s who are running the show now.

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solo2500nt Says:
March 5th, 2009 at 6:30 pm

Ok I have a question open to anybody.

GM is nearing a buck a share. When it hits a buck I’m SERIOUSLY considering opening an E-trade acccount and buying 1000 shares.

It’s a huge gamble but 1000 dollars could potentially be worth 20,000 in a few years.

Does anybody have an online trading account? If so, can you have the shares mailed to you instead of being held by the trading company? If G.M. does go down the tube, I’ll at least have 1000 big squares of toilet paper. Seriously though. I think a small investment in G.M. stock could pay off.

Love to hear opinions……..

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DarcyC Says:
March 5th, 2009 at 6:31 pm

Yes bankruptcy is completely unavoidable now. I guess the only question that remains is: will the Volt be axed or not? If it is, I will be pretty upset, mostly at the amount of time I have wasted on this site reading about something that may never exist. There will be other EVs for sure, that I am not worried about.

(Quote)
Casey Says:
March 5th, 2009 at 6:41 pm

This is the fun part, (Rember me) I TOLD YOU SO, Chapter 11

Most of my friends and people I talk too are not buying a new car, not just because they can’t get financing (they can) or because they don’t want too, most just don’t want to get caught up into the oil company’s gouging again. So they are just waiting for something different.

Also the cost of a new car is so expensive and that’s another reason I think they’re not buying and IMO the reason that hybrids are not selling as fast as you would think is because they cost a grand or two more than their counter part

NO PLUG, NO SALE, JGTVWOTR, DBNGCMEMEV, (my house) =D~~~(my volt)————————-STOP THE BAILOUTS———————-

(Quote)
chevonly Says:
March 5th, 2009 at 6:50 pm

NEWS FLASH COMRADES DATE MARCH 3 2009 VOLKSWAGEN PROFITS ARE UP 15 PER CENT FOR 2008 AND THEY HAVE ALSO INCREASED THERE MARKET SHARE. So at least one company has got it right now if we could just get them to produce an electric car?

(Quote)
JEC Says:
March 5th, 2009 at 7:00 pm

116 #
solo2500nt

Before Statik says it…”Don’t try to catch falling knives!”

You should see my hands.

(Quote)
Anthony BC Says:
March 5th, 2009 at 7:39 pm

“In its annual report filed with the Securities and Exchange Commission, GM also disclosed that Chief Executive Rick Wagoner received a pay package worth $14.9 million in 2008, although $11.9 million of his compensation was in stock and options whose value plummeted to $682,000 as GM’s share price sank.”

God, I feel sorry for Rick, down to $682,000.00. How can he make due on such little funds.

(Quote)
noel park Says:
March 5th, 2009 at 7:41 pm

#115chevonly:

In case you hadn’t noticed, the CEO of Toyota did resign recently.

Also in case you hadn’t noticed, we did start over with a new group of “crooks” about 6 weeks ago. So give a little credit for the mess to the last group.

#116 solo2500nt:

I said pretty much the same thing last summer when it got below $10. Fortunately, I somehow took heed of statik’s advice, as reported by JEC at #120, and saved a few cuts on my hands.

My advice is to use the 1000 – $1.00 bills as toilet paper and save yourself a lot of aggravation.

(Quote)
noel park Says:
March 5th, 2009 at 7:44 pm

#121 Anthony BC:

Yeah, I wonder what ever happened to $1/year? Well I sure hope he saved up a few bucks in past years. Someone reported here that he has been paid a total of over $100 million during his tenure as CEO of GM, so maybe he put a few bucks aside for a rainy day. Ya think?

(Quote)
drG Says:
March 5th, 2009 at 7:45 pm

Why is Red Ink Rick still in charge?

He has destroyed an American institution.

Kick him out!

(Quote)
Red HHR Says:
March 5th, 2009 at 7:49 pm

Ah, does this mean Lyle will not get to test drive a Volt mule anytime in the near future? Darn!

For a moment, when reading this thread, I thought they may bust the unions on the Obama watch… Then I thought again, Naw, wont happen.

Many billions in the anti global warming fund… (take notes Statik) The billions will be used to fund the obsolescent unions in the name of global warming. Yes, we will get our union produced Volt. Of course it will come at ridiculous taxpayer expense.

I would, of course, prefer a Volt produced in a free market.

Red HHR ( with 80 mile commute )

(Quote)
statik Says:
March 5th, 2009 at 7:49 pm

#116 solo2500nt Says

Ok I have a question open to anybody.

GM is nearing a buck a share. When it hits a buck I’m SERIOUSLY considering opening an E-trade acccount and buying 1000 shares.

It’s a huge gamble but 1000 dollars could potentially be worth 20,000 in a few years.

Does anybody have an online trading account? If so, can you have the shares mailed to you instead of being held by the trading company? If G.M. does go down the tube, I’ll at least have 1000 big squares of toilet paper. Seriously though. I think a small investment in G.M. stock could pay off.

Love to hear opinions……..
===================================

Maybe I’ll just copy and paste one of a zillion old replies:

#17 Statik Says:
April 30th, 2008 at 9:17 pm

“Does this even remotely make sense…We all want the Volt, we are hoping for the best…but who amongst us would willingly buy these shares? (or at least to admitting to it on the record, lol)”

http://gm-volt.com/2008/04/30/get-ready-for-the-a123-systems-ipo/#comments
===========================

Lordy, ok, one more time for the road…

A stock losing ANOTHER 45% is not a reason to come in. The numerical value of a stock is meaningless. The market cap vs the value/future outlook is where the game is played. At 1.14 billion right now, it is about 1.14 billion too high…give or take a dollar.

Side note: You can get your GM shares in certificate form if you like, GM’s transfer agent is Computershare.

https://www-us.computershare.com/Investor/default.asp

If you are looking for GM toilet paper, just wait a little longer, it will be available on the Pink Sheets soon enough…you can all you can stand for a couple pennies.

#120 JEC: oops, you are already out there, I wrote this just after I read the original

(Quote)
old man Says:
March 5th, 2009 at 8:02 pm

#106
Agreed, just go in a walmart,kmart,magic mart,sears. northern hydralics, office depot, home depot, lowes, or other stores of your choice and look at all the United States manufactured products. It should not take much over 10 min. per store.

The trouble is some think that manufacturing is assembly. There is a lot more to it than simply putting foreign stuff together.

I hope we will start to buy our own manufactured goods after this recession. If not we will continue to see our standard of living go down.

(Quote)
statik Says:
March 5th, 2009 at 8:07 pm

#121 Anthony BC said:

“In its annual report filed with the Securities and Exchange Commission, GM also disclosed that Chief Executive Rick Wagoner received a pay package worth $14.9 million in 2008, although $11.9 million of his compensation was in stock and options whose value plummeted to $682,000 as GM’s share price sank.”

God, I feel sorry for Rick, down to $682,000.00. How can he make due on such little funds.
—————
#123 noel park said:
Yeah, I wonder what ever happened to $1/year? Well I sure hope he saved up a few bucks in past years.

========================
========================

Actually….lol.

Don’t worry, Rick actually netted 5.4 million in total compensation for the year. His options merely took a dive from 11.9 million to 682K. He got RAISE in his flat salary from $1.6 million in 2007 to $2.1 million (which is what he made in ‘05)…then the ‘perks’

Here are some highlights

$2,100,000- base salary
$682,000- options
$836,000- other/misc
$160,000- for personal use of corporate aircraft
$270,000- for personal security
$11,500- for use of company vehicles
$12,000- for financial and estate planning

/SEC disclosure is awesome

(Side note: I was trying to be ‘less negative’ by not mentioning Rick (or any of the other execs pay/compensations when they filed it…but fair game now I suppose)

(Quote)
noel park Says:
March 5th, 2009 at 8:15 pm

#127 old man:

If anything good came from $147/barrel oil, it was that the cost of shipping stuff here from China went up so much that people actually started to make some stuff here again. Maybe not a whole lot, but I did see several examples.

At #47 wirenutjd quotes from a commentary by Kevin Kerr on the Edmunds website, postulating that oil will top $300/barrel within 1 to 3 years. If so, I assume that the above scenario will really start to take hold. Unless somebody invents a Voltec container ship, LOL.

Also, those of us who live around the ports may get to breathe a bit less toxic, carcinogenic, diesel exhaust.

As my mother always used to say, “It’s an ill wind that blows no good.”

(Quote)
NZDavid Says:
March 5th, 2009 at 8:15 pm

Hahaha Solo, it does not work that way. You will only get one piece of paper which says you own 1000 shares. Best to frame it and say it’s a really expensive artwork.

DarcdyC: I agree with you, except, for me, my time here has not been totally wasted, I have learn’t a lot and made many online friends from all over the world.

As to shooting the messenger here. What Statik has been saying consistently for the almost two years I have been here is:

Without continuous sales growth GM can’t survive. The SAAR is dropping year over year and GM is where it is. Statik also says a GSB is the only way out and I agree. No rational bondholder is willingly going to accept 10 cents in the dollar. No sane retiree is going to accept having their pension slashed to 10 cents in the dollar etc.

However, unless the huge legacy debt burden is removed, there is NO possible way GM can remain solvent.

If GM goes Ch 7 the government will have to pick up the retirees pensions so they should do so anyway. The Volt can continue to be subsidised , after all, it’s not exactly free to keep a carrier battle fleet stationed in the Persian Gulf and another outside. Do you want to add the cost in lives to the price of gas as well?

/Starting to sound like a rant now. At least I kept quiet during the last thread.

Oh yeah, LJGTVWOTR
And like the two old ladies, NO plug, NO sale.

(Quote)
Ed M Says:
March 5th, 2009 at 8:24 pm

ThombDbhomb Static may be a clever person but that doesn’t mean he’s not Narcissististic.

def: (Narcissists will strain every muscle to meet their own “flawless” image, and demean or destroy anyone or anything who casts any doubt on this image.)

(Quote)
NZDavid Says:
March 5th, 2009 at 8:24 pm

Statik @128.

Hahaha. The 270K for ‘personal security’ would seem money well spent to me. I think he will really need it soon. lol.

/not really funny, but I don’t want to cry.

(Quote)
noel park Says:
March 5th, 2009 at 8:25 pm

#128 statik:

After all my preaching above about staying positive, I guess I had better just shut up. It is tough some times. At least he got some professional financial advice to help him weather this poverty. I wonder if they advised him to buy up GM stock at $1.00? Plus, $270,000 for “personal security” seems like a pretty good investment at this point.

Of course getting the taxpayers to cough up billions of dollars is probably a lot better way to make money than building cars. So maybe he’s worth it to the Board?? I was going to say and the stockholders, but naaahhh.

I feel like we’re the chorus in a Greek tragedy.

(Quote)
NZDavid Says:
March 5th, 2009 at 8:28 pm

Ed M.

ThombDbhomb and Static [sic] are two different people. IMHO neither is Narcissistic.

(Quote)
NZDavid Says:
March 5th, 2009 at 8:44 pm

Noel says: I feel like we’re the chorus in a Greek tragedy.

Amen to that. I got laid off yesterday. So New Zealand, at least as far as I am concerned, is now officially in a Depression. lol. Power projects are being deferred all over the place, no finance, and demand is way down. We usually increase electricity usage about 1.5% per year, but not any more.

http://www.electricityinfo.co.nz/comitFta/ftaPage.demand

A drop of this size has to be reduced business demand, another couple of months until it starts getting cold and we will know for sure.

Further to my 130.
http://www.greencarcongress.com/2009/03/february-us-ldv.html#more

A picture worth billions of $’s. The SAAR graph, that is!

(Quote)
Jeffhre Says:
March 5th, 2009 at 8:49 pm

Edit to Nostradamus #109, Noel Park # 133

Scream the following at the top of your lungs in the voice of George Bailey that Jimmy Stewart used in hysterics after leaving the Bailey Building and Loan.

“Close down your factories NOW !!!
Lock the door and send everyone home!!!
Lawsuits will follow, but who cares, they will be tied up in the courts for YEARS, meanwhile, you can turn a profit.
It really is this simple.
Fools are running this company. I tell you FOOLS.
Quit basing your entire existence on Obama handouts, that is NOT a business plan.”

Thank you Nostradamus. Hilarious…well at least as others have said, it keeps me from crying!

(Quote)
Jeffhre Says:
March 5th, 2009 at 9:04 pm

NZDavid.

I hope that you quickly find new opportunities that are more lucrative and fulfilling than ever before, Good luck to you in your new endeavors.

(Quote)
JEC Says:
March 5th, 2009 at 9:15 pm

135 NZDavid

Sorry to hear you got the ax. Unfortunately, you are not alone. I find I sleep less at night worrying about losing my job and the economy.

Hope you all the success in finding a new job quickly.

Good luck my friend and keep your chin up. Things will get better, and someday we will all tell our kids about how hard we had it, and we will laugh (as hard as it seems now).

(Quote)
RB Says:
March 5th, 2009 at 9:27 pm

#117 DarcyC asked
Yes bankruptcy is completely unavoidable now. I guess the only question that remains is: will the Volt be axed or not?

The Volt will not be axed and will come to market in 2 years as expected. The Volt is a hot property for symbolic reasons as well as technical innovation. “Daughter of GM” or whatever the company is that exists then will proudly introduce the Volt.

(Quote)
LauraM Says:
March 5th, 2009 at 9:37 pm

#119 solo2500nt

I see some other people have answered you. But, in case you want another opinion….Don’t. Even if GM survives, it doesn’t mean that the stock will be worth anything. If GM goes through Ch. 11, the stock will be worth zero. And even if it doesn’t, by the time GM gets through offering stock to bondholders, unions, etc., the current shares will be worth essentially nothing. Ditto for Ford, by the way. And Citibank, AIG, etc.

Now, if you could get one of those 1950’s certificates, I believe that has some value for collectors. So the current certificates might also be a collectible in about 50 years, but I’d stick with ten shares.

#121 Anthony BC /#123 noel park/#128 Statik

By CEO standards, Rick Wagoner got nothing. Alan Mulally’s salary is roughly $22 million a year. Bob Nardelli got over $200 million from Home Depot after running the company into the ground. Chuck Prince, the guy who destroyed Citibank, walked away with $100 million. Richard Fuld at Lehman got $71.90 mil in 2007. (Not to mention $354.03 mil over the previous five years.) And to put that into perspective, the CEO of Oracle received $190 million that same year.

That said, I agree that he makes too much money, especially given GM’s problems. (Although I doubt anyone could have fixed GM given where it was when he took over.) But this is not just a GM problem. This is a CEO compensation in America problem.

(Quote)
Jeffhre Says:
March 5th, 2009 at 9:56 pm

RB 139 “The Volt will not be axed and will come to market in 2 years as expected. The Volt is a hot property for symbolic reasons as well as technical innovation. “Daughter of GM” or whatever the company is that exists then will proudly introduce the Volt.”
____________________

What 2 yrs? It’s only 654 days 5 hrs 5 mins and 30 seconds!

(Quote)
statik Says:
March 5th, 2009 at 11:22 pm

#131 Ed M said:

ThombDbhomb Static may be a clever person but that doesn’t mean he’s not Narcissististic.

def: (Narcissists will strain every muscle to meet their own “flawless” image, and demean or destroy anyone or anything who casts any doubt on this image.)
=============================

I’m going to say my image is far from flawless, lol. Did you see the part in this thread (#90) about me mentioning that I was more than slightly mentally challenged and bought GE, only to get my butt handed to me?

I think everyone is a little over indulgent on the ’self-love’ from time to time, and I can admit I am guilty of that sin on occasion…but I’m working on it.

/catch you on the next one, (=

(Quote)
statik Says:
March 5th, 2009 at 11:23 pm

#135 NZDavid

Amen to that. I got laid off yesterday. So New Zealand, at least as far as I am concerned, is now officially in a Depression. lol. Power projects are being deferred all over the place, no finance, and demand is way down. We usually increase electricity usage about 1.5% per year, but not any more.
================================

Sorry to hear that my friend. Usually, I’d have a pithy comment about New Zealand or something to lighten the mood…but not today, that just sucks. It is not easy to see people you know and respect to get sucked into this mess.

/all the best

(Quote)
avatar Says:
March 5th, 2009 at 11:43 pm

Our family business started heading south and we knew it couldn’t be saved so-

We sold it for what we could get.
Took a deep breath.
Cried a bit.
Went into bankruptcy.
Felt horrible and we are still paying off the debt.
In the end.
The best thing we ever did- and a handout is not the answer.

GM will be on the hook forever.
They simply can’t afford more debt.
They need lower costs and now!

(Quote)
Van Says:
March 6th, 2009 at 12:06 am

Folks, if GM reorganizes under Chapter 11, it may not be the end of the world. This is the only path to eliminate the UAW legacy costs and the bond holder costs to allow GM to make reasonably priced cars at a profit.

But the current management must go. In a recent Consumer Reports, Ford and the OEM from Japan were rated as making quality cars, but GM and Chrysler made cars with less than average quality. Time for a change.

(Quote)
Ed M Says:
March 6th, 2009 at 12:14 am

static #142: gotcha, heh heh, just yanking your chain

(Quote)
Dave K. Says:
March 6th, 2009 at 12:22 am

hi NZDavid #135,

From one David to another, sorry to hear about the job situation. My wife is currently on a mandatory reduced work schedule. Her employer is an industrial/defense related manufacturer. The boss claims normalcy will return in July.

I lost my “oil based” job in 2003 and am doing very well again at something less stressful. Getting respect, good increases, and benefits as well. Things will work out.

=D~

(Quote)
Paul-R Says:
March 6th, 2009 at 12:46 am

MarkinWi,

You mentioned that 40% of the stimulus bill is for tax cuts, but one person’s “tax cut” is another person’s “welfare”. Lets look at the distribution of who pays our income taxes…

Top 1% of wage earners pay 39% of our taxes.
Top 5% of wage earners pay 60% of our taxes.
Top 10% of wage earners pay 70% of our taxes.
Top 25% of wage earners pay 86% of our taxes.
Top 50% of wage earners pay 97% of our taxes.
Bottom 38% of wage earners pay ZERO taxes.

President Obama doesn’t like the 10% evil rich (that selfishly create most jobs and pay 70% of all our taxes), so their taxes are going to go up. Much of the rest are getting tax cuts, but about half those folks don’t actually pay taxes. So 50% of President Obama’s tax-cut stimulus is just free money for the poor/lazy, which I prefer to call “welfare”.

The really scary thing (IMHO) is that the welfare percentage is now rapidly growing due to the growing unemployment. Once above 50%, only the social-welfare party (aka democrats) will ever get elected again. Then as a one party state, anything goes. The government eventually controls everything … people stop trying to innovate because there is no point … game over … innovation is dead. Capitalism is dead. Welcome to the United States of Venezuela.

And of course, ultimately the extra tax load on the evil rich (intended to help the poor) will just rain down on the pour as higher priced (or lower quality) goods/services. So their welfare checks aren’t really getting them anything good in the long run.

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NZDavid Says:
March 6th, 2009 at 12:47 am

Jeffhre @138, JEC @138, statik @143, Dave K @147.

Thanks.

Hey, look on the bright side, at least I get to hang about here at the right time of day for awhile.

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DonC Says:
March 6th, 2009 at 12:58 am

#148 Paul-R says “Lets look at the distribution of who pays our income taxes…”

Meaningless and misleading numbers. If you talk about payroll taxes then you get completely different numbers.

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NZDavid Says:
March 6th, 2009 at 1:44 am

Statik: your GE is taking a pounding right now. It seems someone is trying to sink it.

http://market-ticker.denninger.net/archives/853-More-GE-IMPORTANT.html

Denninger is having kittens.

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Paul-R Says:
March 6th, 2009 at 1:46 am

DonC, I don’t understand why my numbers are meaningless and misleading. Can you provide your numbers for payroll taxes to support your assertion? Thanks.

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solo2500nt Says:
March 6th, 2009 at 1:57 am

Thanks everyone. Advice taken.

I was making comparisons in my head to Chrysler in 1979 when shares fell to about $0.50, then rebounded years later, but things are a lot different now.

A: Chrysler had a viable product in the pipeline in the form of the “K” car. Yea it was an ugly little box but it sold like hotcakes and saved the company.

B: The Volt cannot be produced in the same numbers as the “K” car and even if it could, they may not not necessarily make a profit.

C: The U.S. was still an industrialized nation in 1980 and a blue collar worker could afford a car.

D: This is the Mother of all recessions.

E: GM may dilute their shares by issuing even more.

Oh well, maybe I’ll just start a ponzi scheme to make my millions. Anybody want to invest in my new electric car company????

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NZDavid Says:
March 6th, 2009 at 2:42 am

Solo, Citibank’s below a dollar today maybe you could stock up on those as well.

/sarcasm. I don’t really think that’s a good idea.

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Texas Says:
March 6th, 2009 at 5:00 am

I’m hoping GM is just rattling the cages to make sure they get some more money. Put a little scare into the decision makers.

I’m not sure why the Big 3 thought that a recovery was just around the corner but I’m guessing they knew how bad it was going to be. They just needed the money and knew that once you put in a little it’s hard not to put in more. lol. People hate to open up their wallets but once they do, it’s hard for them to close them, especially if that means they will definitely lose what they already put in. Human nature.

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Maynard Keenan Says:
March 6th, 2009 at 6:25 am

#153
Well my American friend – this isn’t the mother of all recessions.

It is for America – and the rest of the world is tightly networked with America. But as America goes down (and yo will have to get used to a lower standard of living – I’m sorry for that – but maybe you will be back up in about 5-10 years), the rest of the world wil get more independant from America.

I’m from Germany, the city of Stuttgart, where Daimler and Porsche is seated. Daimler also isn’t doing very well, because it has a big market in the USA. But it is another dimension compared to GM. No doubt they will survive. By now no German automaker did get any money from the government (although many of you think we are an socialist country) – and our Kanzlerin Angela Merkel made very clear, that in her opinion, Opel is not a system-relevant company (like the banks). So probably no car company will get any loans in Germany. And (even as a guy from Stuttgart) I think that is the only right way.

Take a look at the biggest German car builder: Volkswagen. They don’t have a big market in the USA, which was worrying them in the past, but now they are doing very well…

So as I said before: this isn’t the mother of all recessions. The world will keep spinnig – and America won’t go bancrupt, because the rest of the world will save you. (Because we like and need America.)

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RB Says:
March 6th, 2009 at 6:58 am

NZDavid

Very sorry to hear about your getting laid off. I hope things work out well for you nonetheless, and a bad situation turns into an opportunity. Usually it does not seem like it, but sometimes that happens.

RB

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Luke Says:
March 6th, 2009 at 10:38 am

LauraM @ 81,

But my solution would be to spend the money on investment rather than social welfare programs. That means a real infrastructure stimulus instead of one where infrastructure is 10 cents on the dollar. That means spending on science and research. That means spending on high speed trains which will reduce energy consumption than a million volts. That translates into jobs, and it would pay a dividend in the future

I thought that’s what Obama’s plan was. At least that’s what it sounds like to a news junkie like myself — but, like the congress-people voting on it, I haven’t exactly pulled it up in THOMAS to see what it actually says…

As I’ve said elsewhere, I like the Obama plan, as I understand it. I just pull my former-libertarian cred out when that Tim fellow needs to be hit with my handy clue-by-four.

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Luke Says:
March 6th, 2009 at 10:54 am

Statik @ 72,

Thanks! It’s always good to get to know someone better, and I’ll be able to read your comments even more fully now!

I rarely bring my job into these discussions, either. Partly because it’s not relevant, and partly because I like to play on the Internet without bringing the credibility of my employer (currently a well-known supercomputing center) into my fun. But I certainly do try to bring in things that I’ve learned by providing computer resources to engineers and scientists into the discussion.

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The Grump Says:
March 6th, 2009 at 12:10 pm

Once I built a Chevy, called it the Volt
it was a race against time

Once I built a Chevy – now I’m done…
BROTHER, CAN YOU SPARE A DIME?
—————————————

I just haven’t been able to get that song out of my head lately. I wonder why?

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noel park Says:
March 6th, 2009 at 12:50 pm

NZDavid:

I was going to LOL about your #132, beating me to the punch on Mr. Wagoner’s “security” expenses, but your #135 sort of slowed me down for a minute.

It is really interesting how strong an impression of people one gets here. My sense is that you are an extremely smart and competent guy, who will very shortly go on to bigger and better things. Every good wish that it shall be so.

Thank you for all of your extremely valuable insights here. I am looking forward to how you will top them in the future!

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noel park Says:
March 6th, 2009 at 12:53 pm

#169 The Grump:

Yeah, me too.

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Electric Vehicle Owner Says:
March 6th, 2009 at 1:26 pm

#119 chevonly

re: VW electric

you mean like they introduced at last year’s Geneva show?

http://www.treehugger.com/files/2008/02/volkswagen_to_i.php

http://www.thedailygreen.com/living-green/blogs/gas-mileage/vw-hybrid-gas-mileage-460527

http://jalopnik.com/363007/vw-golf-tdi-hybrid-combines-best-of-both-worlds

The’ve decided that rich people will buy it, so as soon as they finish emptying the current gold mine that’s the Jetta TDI and the economy recovers, they’ll consider it for trickle down production.

The crossover version with the right suspension would dominate the Dakar Rally.

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noel park Says:
March 6th, 2009 at 2:56 pm

#140 Laura M:

Yeah, and it’s a lot more than a CEO problem. How about Mr. Lutz, $6 million more or less. Or his replacement, $4 million plus. Or Mr. Henderson??? Right up there, you can bet.

Recently 60 Minutes, or one of its clones, did an interview with a Wall Street denizen about the requirement that CEOs of companies getting bailouts be paid no more than $500K/year. He said that all of the Wall St. firms are interpreting this to mean the CEO only. Anybody below that level is exempt – business as usual.

The interviewer asked how many people that covered. The guy just rolled his eyes and said “thousands”.

#144 avatar:

I feel you, brother.

All of us running small businesses are walking a very high wire with no net at the moment.

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Randy C. Says:
March 7th, 2009 at 3:34 am

I believe the current economic crisis was caused by the high fuel prices last summer (only 6 months apart). If the prices weren’t the cause they surely accelerated and intensified the decline. Unfortunately GM’s good buddy President Bush refused to see the hole in the economy and steered America the wrong way. The hole is, we allowed our economy to become very dependent on petroleum fuel so that large sums of money has to leave our shores every day. This can not go on forever without consequences.

By fighting the requirement for electric cars, the automakers destroyed the fastest and cheapest solution to the dependence problem. By stopping all electric car development, the progress way from oil dependence was set back at least 10 years. Electric cars were on the road and working well at the beginning of this decade. But GM using the excuse “we were no longer making the parts to keep the EV1 safely on the road” decided America didn’t need electric cars to insulate us from petroleum. This reasoning sounds like something a lawyer cooked up to hide a bad executive decision.

Bio-fuels currently can’t be made in enough quantity without affecting food production. Hydrogen is a long way from being a viable fuel with NONE of the required infrastructure in place, manufacture, distribution, and dispensing. With electric cars 2/3 of the infrastructure exists, only the dispensing part needs to be developed. Can you think of a building built in the last 50 years that was never intended to have ANY kind of electrical service?

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Adamus Says:
March 7th, 2009 at 2:39 pm

I got it! Give GM to the Chinese! They got loads of cash! They’re going to own the U.S. anyway! We could all learn Mandarin by way of Rosetta Stone. Then, we will all “just get along now” (King) as one big happy global community that speaks Mandarin ala Phelps!

I knew I wasn’t going to regret buying shares in Rosetta Stone corp (a.k.a. a secret GM concern to get your money somehow someway!)

King, Rodney (Interview) Police brutality victim March 2, 1991

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Nostra Damus Says:
March 9th, 2009 at 10:17 am

I will support for GM innovative idea. GM is a brand of all Americans. We should not let other brand step on our GM. GM start the automotive industry and why should we give GM to the Chinese. Maybe because you’re a Chinese. I think, if GM will lower their pricing and increase their service quality, probably they will get back the confident of those customer change brand. If I we’re GM, sell their old GM product in lower cost because they already bailed out. From that, they can start creating hybrid cars without depending on Gas.

I have a project when I was on high school, I built a mini car with recyclable energy. I use rechargeable battery, solar panel and wind energy. While the mini car is running, I had a wind absorber in front of the mini car and convert it to an energy (wind energy – wind turbine) and use it to charge the battery and I also use a mini solar panel and it will also charge the back-up battery when it is on idle mode and specially on the parking lot.

This project was very successful. I hope GM will get this kind of concept. Unfortunately, because in my country they didn’t recognize my project because during that time, they don’t feel the economic crisis so I change my skills into a Software Architect. Will, at least I tried to build a project with on my own effort.

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Gman Says:
March 14th, 2009 at 2:29 pm

Folks: for far “more truth” concerning vehicles and their reliability and failures, try perusing “CarComplaints.com.”
And specifically find the list for the vehicles with the most reported problems. http://www.carcomplaints.com/top_vehicles.shtml
See where the 2001 Honda Civic and 2003 Honda Accord fall. Does Consumer Reports tell you anything about this? Go on-line and research Honda transmissions (Honda Transmission Problems) for the period of the late 1990’s through the mid-2000’s and tell me with a straight face that there aren’t countless hair-raising failures. Honda’s response, deny the problem or put a replacement transmission back in with the SAME FAILURE MODE left intact so it can again fail within a couple of years or so. Consumer Reports doesn’t even list the 2003 Honda Accord as having any “transmission problems!” Why did it take 7+ years for Consumer Reports to even finally indicate millions of Toyota’s could suffer complete engine failures due to “sludging?” “Click and Clack” indicated in a column in 2001 they were already well aware of this problem as were other mechanics! Someone in the building where I worked had a complete Camry engine failure just outside their initial 3yr/36,000 mile warranty period. The engine was replaced at HIS EXPENSE. This was prior to the more common knowledge of the problem and the extension of the warranty to 8yrs/100,000 miles as a means to settle the class-action lawsuit — before it finally arrived in court. Now, do you think someone who tells you you’re dumb for purchasing anything other than Toyota (and especially citing Consumer Reports) is going to stand-up publically and admit a complete engine failure just outside the warranty period? NOT ON YOUR LIFE! Of course Toyota has “a good reputation.” None of the owners stand up and tell the truth in public. They instead “quietly” fix the problem and sell or trade the vehicle. Seriously, I have yet to meet a Honda or Toyota owner who will “blast” their vehicle in public even AFTER SUFFERING MAJOR EXPENSIVE problems. They are at least starting to do it on-line.

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User-Centered Design | The Adventures of Graduate School Says:
October 26th, 2009 at 3:15 pm
Seats Says:
October 28th, 2009 at 11:07 am

cool pics

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User-Centered Design, Part II (+ Design for Human Emotions) | The Adventures of Graduate School Says:
November 3rd, 2009 at 12:15 am

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