AND 
GM Exits Bankruptcy Today: the New GM Starts Now
After a lightning fast 40 days, GM exits bankruptcy protection today by successfully selling the best assets of the old company to the new GM. And so on this day the new GM begins.
The new GM has only four brands; Chevrolet, Cadillac, GMC, and Buick. Its footprint is drastically reduced with less dealerships, plants, workers, and assets. Most importantly the old GM’s outstanding debt has been reduced by more than two thirds, and its balance sheet starts anew. $50 billion in new government funds are also on hand to send off the new company.
Though the majority owner, the US government wants a quick exit from the car business, and an IPO is planned for next year.
Fritz Henderson will remain CEO, and the executive workforce is being trimmed by one third. And in a surprise move, our favorite car guy Bob Lutz will stay on after all full-time and defer retirement. Lutz will oversee marketing, product design and communication.
“Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” said Fritz Henderson, president and CEO. “We are deeply appreciative for the support we have received during this historic transformation, and we will work hard to repay this trust by building a successful new General Motors.”
The Chevy Volt, and what it represents, independence from oil, is now the centerpiece for the new company. What started as a concept and a dream 2-1/2 years ago embodied by and encouraged by all of us at this site has now become the shining beacon of the new company’s entire future. We followed GM down from boom to bust and we’re still here, still waiting for our Volts. Good luck new GM, don’t let us down.
Below is the video of CEO Fritz Henderson’s press conference that started 7/10 at 9AM in which further details are provided:
Full Press Release:
The New General Motors Company Launches Today
* GM gets back to the business of building great cars and trucks, serving customer needs
* New company created from GM’s strongest assets
* Four core brands backed by the nation’s largest and strongest dealer network
* Streamlined organization on a global basis for faster decisions, sharper focus on the customer
* Commitment to open communications
DETROIT – The new General Motors Company began operations today with a new corporate structure, a stronger balance sheet, and a renewed commitment to make the customer the center of everything the new GM does.
“Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” said Fritz Henderson, president and CEO. “We are deeply appreciative for the support we have received during this historic transformation, and we will work hard to repay this trust by building a successful new General Motors.”
Created from the old GM’s strongest operations in an asset sale approved by the bankruptcy court on July 5, the new GM is built on:
* Four core brands in the U.S. and the largest, strongest dealer network in the country,
* A fresh lineup of Chevrolet, Cadillac, Buick and GMC cars, trucks and crossovers, each with leading-edge designs and technologies that matter to both consumers and the environment,
* A competitive cost structure, a cleaner balance sheet, and a stronger liquidity position that will enable GM to invest in new products, key technologies, and its future,
* A winning culture focused on customers and products.
“One thing we have learned from the last 100 days is that GM can move quickly and decisively,” said Henderson. “Today, we take the intensity, decisiveness and speed of the past several months and transfer it from the triage of the bankruptcy process to the creation and operation of a new General Motors.
“Business as usual is over at GM,” said Henderson. “Today starts a new era for General Motors and everyone associated with the company. Going forward, the new General Motors is fully committed to listening to customers, responding to consumer and market trends, and empowering the people closest to the customer to make the decisions. Our goal is to build more of the cars, trucks, and crossovers that customers want, and to get them to market faster than ever before.”
Committed to great cars and trucks
The new General Motors launches with a clear and simple vision – to design, build and sell the best vehicles in the world.
“A successful auto company needs to focus on both the cost and the revenue sides of the business,” said Henderson. “Success on the revenue side means building the stylish, high-quality, fuel-efficient vehicles that customers want – and getting them to market fast.”
Despite the recent downturn, GM has maintained its cadence of strong new products. In the U.S., for example, the Chevy Camaro has surged past its rivals to lead its segment, while the new Chevy Equinox, Cadillac SRX, and Buick LaCrosse are earning strong initial reviews. Later this year, the Cadillac CTS Sport Wagon and GMC Terrain debut, followed next year by the Chevy Volt, Chevy Cruze and Cadillac CTS Coupe.
This emphasis on great new products is also reflected in the Chevy Agile now launching in Latin America, in the Chevy Cruze and Buick Excelle in Asia Pacific, and in the new Opel Astra in Europe.
Just last month, GM announced its intention to build a new small car at a plant in Orion Township, Michigan, which will add to GM’s growing portfolio of fuel-efficient cars and restore approximately 1,400 jobs.
GM also has moved aggressively to develop a full range of energy-saving technologies, including advanced internal combustion engines, biofuels, fuel cells, and hybrids. The company is also a leader in the development of extended-range electric vehicles, with its first model, the Chevy Volt, currently undergoing road testing and scheduled to launch in 2010. The new GM is also taking steps to make advanced battery development a core competency, and expects to make additional announcements on this matter late this summer.
“The success of our recent launches and the exciting new vehicles and technologies we have in the pipeline are evidence of our ongoing commitment to excel at everything we do,” said Henderson. “Our goal is to make each and every General Motors car, truck and crossover the best-in-class.”
Stronger brands and dealers
As part of its reinvention, the new GM has also focused its resources on four core brands and a stronger, more effective dealer network.
General Motors’ core brands – Chevrolet, Cadillac, Buick and GMC – will have a total of just 34 U.S. nameplates by 2010. This emphasis on fewer, better entries will enable the new GM to put more resources into each nameplate, resulting in better products and stronger marketing.
In May, the company accelerated its dealer consolidation efforts, with the goal of reducing the number of GM dealers in the U.S. from 6,000 this spring to approximately 3,600 by the end of next year. Even so, GM will still have the largest dealer network in the U.S. and GM dealers have committed to continue to improve the total customer experience for GM customers.
“We’re also working on new ways to make car buying more convenient for our customers, including an innovative new partnership with eBay in California to revolutionize how people buy vehicles online,” Henderson said. “Customers will be able to bid on actual vehicles just like they do in an eBay auction, including the option of choosing a predetermined ‘buy it now’ price. We’ll be testing this and other ideas with our dealers over the next few weeks, and hope to expand and build upon them in the coming months. In all cases, our goal is to make the shopping and buying process as easy as possible for GM customers – on their time and their terms. Stay tuned.”
A pledge to regain trust and confidence
General Motors Company is primarily owned by the governments of the United States, Canada and Ontario, and by a trust fund providing medical benefits to UAW retirees. Specifically, common stock will be owned by:
* U.S. Department of the Treasury: 60.8 percent
* UAW Retiree Medical Benefits Trust: 17.5 percent
* Canada and Ontario governments: 11.7 percent
* The old GM: 10 percent
“We are very appreciative of the support provided by the stakeholders through the transformation process. Though General Motors Company will not initially be publicly traded, we will be transparent in our financial and other reporting to further strengthen trust and confidence,” said Henderson. “We expect to take the company public again as soon as practical, starting next year, and to repay our government loans as soon as possible. We are required to pay off the loans by 2015, but our goal is to repay them much sooner.”
Stronger balance sheet
General Motors Company launches with a strong balance sheet, a competitive cost structure, and a strong cash position, enabling it to compete more effectively with both its U.S. and foreign-based competitors here in the U.S., and to continue its strong presence in growing global markets.
The new company acquired old GM’s strongest operations and will have a competitive operating cost structure, partly as a result of recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW).
In the U.S., the new GM will be a far leaner company. By the end of 2010, the company will operate 34 assembly, powertrain, and stamping plants, down from 47 in 2008, and capacity utilization is expected to reach 100 percent during 2011. Overall U.S. employment will decline from about 91,000 at the end of 2008 to about 64,000 at the end of this year, creating a company sized to respond quickly to changes in the market, while still retaining the global scope necessary to develop world-class products and technologies.
The new GM will begin with a much stronger balance sheet, including U.S. debt of approximately $11 billion, which excludes preferred stock of $9 billion, and could change under fresh-start accounting. In total, obligations have been reduced by more than $40 billion, representing mostly unsecured debt and the VEBA trust fund that provides medical benefits to UAW retirees. The stronger balance sheet and lower break-even point will allow the new GM to reduce its risk, operate profitably at much lower volume levels, and reinvest in the business in the key areas of advanced technology and product development.
GM’s subsidiaries outside the United States were acquired by the new company and are expected to continue to operate normally without any interruption.
A new way of doing business
With the launch of the new General Motors, company leaders will work to change the culture of the company, making the speed and decisiveness that GM demonstrated over the past several months the new way of doing business, and adding an intensified focus on the customer.
Edward E. Whitacre, Jr., who oversaw the creation of the new AT&T, will serve as chairman of a GM board with a number of new directors. Henderson will continue as president and chief executive officer, working closely with Whitacre. He also will take responsibility for GM’s operations in North America, eliminating the GM North America president position.
To speed day-to-day decision-making, two senior leadership forums, the Automotive Strategy Board and Automotive Product Board, will be replaced by a single, smaller executive committee, which will meet more frequently and focus on business results, products, brands, and customers.
Bob Lutz has agreed to join the new GM as vice chairman responsible for all creative elements of products and customer relationships. Lutz and Tom Stephens, vice chairman, product development, will work together as a team, partnering with Ed Welburn, vice president of design, to guide all creative aspects of design. GM’s brands, marketing, advertising, and communications will report to Lutz for consistent messaging and results. He will report to Henderson, and be part of the newly formed executive committee.
“I am pleased to announce that we are ‘unretiring’ Bob Lutz so he can fill this important position in the new GM,” said Henderson. “He has a proven track record of unleashing creativity in the design and development of GM cars and trucks. This new role allows him to take that passion a step further, applying it to other parts of GM that connect directly with customers.”
General Motors will also end its regional operating structure, moving decisions closer to the customer. This eliminates the regional president positions and the regional strategy boards. Nick Reilly will be named executive vice president of GM International Operations (GMIO) which will be based in Shanghai.
GM is also removing layers of management – reducing the number of U.S. executives by 35 percent and overall U.S. salaried employment by 20 percent by the end of this year – flattening the organization and speeding decision making.
Additional details of the new structure and leadership moves will be communicated later this month, said Henderson. “These and other actions will simplify our organizational structure and reduce the level of bureaucracy that, in the past, has prevented GM from moving faster.”
More direct communications
Henderson also announced initiatives to open more direct communications between customers and GM employees at every level. “Beginning next week, we will launch a ‘Tell Fritz’ website where customers, or anyone else, can share ideas, concerns, and suggestions directly with senior management. I will personally review and respond to some of these communications every day.”
Henderson and other General Motors leaders will go on the road regularly to meet with consumers and others with a stake in the new GM. “In August, we’ll begin regular visits with customers, dealers, suppliers, employees and others – in the U.S. and abroad – who impact our relationships with customers. We’ll be listening to their ideas, and acting on the ones that will improve our ability to serve our customers better. And of course, other executives and I will continue to reach out to customers through our ongoing web and Twitter chats.
“Today we launch the new General Motors, and our promise is simple. We will be profitable, we will repay our loans as soon as possible, and our cars and trucks will be among the best in the world,” said Henderson. “We recognize that we’ve been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done.
“To our current customers, we appreciate the confidence that you have placed in us, and going forward, we’ll offer you nothing less than great cars, trucks and crossovers, with unmatched customer service. To those who have supported us through this challenging time, we are deeply grateful,” said Henderson. “And to those who have never tried a GM vehicle – or who have tried one and been disappointed – we look forward to the chance to win your business and earn your trust.”
# # #
210 Responses to “GM Exits Bankruptcy Today: the New GM Starts Now”
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July 10th, 2009 at 6:09 am
Already? They might actually be viable if they have shed enough debt. Just get the Volt into production!
Not too sure if Lutz is a long-term positive or not. The guy knows cars, but has a decided shortage of common sense. Putting Lutz in charge of communications… Hmmm….
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July 10th, 2009 at 6:11 am
I am pleased the Bob Lutz is staying on board. I think he will be a marketing success. I also think he is their best man for TV.
Second and possibly of more interest to me is Statik’s view of the expected I P O? I would think of it as a good investment [if] THE STOCK WE ARE BUYING IS THE GOVERNMENT OWNED STOCK. I don’t want the gov to be my forever partner in an investment.
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July 10th, 2009 at 6:18 am
Great News!
Let’s finish this drama, and get back to work building cars we want to buy!!!!
Go New GM! Go New-GM Volt Team!!!
NPNS
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July 10th, 2009 at 6:20 am
NOW is the reality of these new freedoms to
create,
work,
advance science,
produce,
market,
help change the planet for us all, and
lead the way to green electric motoring,
all of which have thankfully been finalized for
America’s GM .
VOLTec is coming.
GM’s time is NOW.
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July 10th, 2009 at 6:23 am
Bob Lutz, now doing communication and marketing after all that has been said on this board?
I respect his product design skills but isnt he a bit old for the other roles?
I nominate my daughter…she is twenty seven…
Oh well, no one said it would be easy…
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July 10th, 2009 at 6:25 am
Debt and competition will make or break the IPO. It’s the Chevy Volt, Camaro, Cruze, GMC trucks and the Buick line against the rest of the world. As the last thread highlighted, the competitors EV’s need to achieve at least 200 miles per charge.
The Chinese BYD makes a weak product at best. The Volt at under $40,000 should get the most attention for the next two or three years.
Good to hear Bob Lutz will stay on. Here’s some advice Bob. Eat right and get to the gym 4 times a week. Not because you want to, because you know you should.
=D~
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July 10th, 2009 at 6:43 am
Seeing how quickly and cleanly this came off, Ford should follow suit while the getting is good.
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July 10th, 2009 at 6:44 am
Congratulations GM! ….for what I’m sure history will recognize as the rebirth of an automotive & industrial giant!
It’s great news that Bob Lutz is staying on too! He’s not only a consummate “car guy”, he’s a smart risk taker —GM might never have developed the Volt without him!
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July 10th, 2009 at 6:49 am
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July 10th, 2009 at 6:52 am
But I think Bob is highly adaptive, as is Mr. Henderson.
It is important to get to know the people you are going to do business with.
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July 10th, 2009 at 7:02 am
And so we begin anew.
Good luck to you New GM, and thanks for keeping the Volt program going.
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July 10th, 2009 at 7:09 am
Tough day for the naysayers.
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July 10th, 2009 at 7:26 am
I hope with Mr. Lutz still in a position of influence, buyers do not think the New GM is a “crock.” I saw what looked like an “optional” spoiler on the back of an IVER, and I said “what a crock.” This option adds weight and increases drag. Why would the new GM push something that speaks against providing buyers with the “highest quality?” Folks who use emotional appeal to sell cars rather than putting out the best product money can buy. The folks over at GM need to think carefully about what it means for the average prospective buyer to be able to “google” GM car quality.
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July 10th, 2009 at 7:28 am
Bob Lutz is the guy who got the Volt program started. He’s the visionary in the company. They need him more than anyone.
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July 10th, 2009 at 7:35 am
Lutz is the one that got GM to do the Volt concept car.
Lutz originally wanted a pure BEV. The guys who had first-hand experience with the EV1 said a pure BEV with enough range to make people comfortable would be too expensive, so the extended range EV concept was used.
The marketing guys took a look at typical driving habits:
http://www.bts.gov/publications/omnistats/volume_03_issue_04/html/figure_02.html
and found that 40 miles of AER would cover around 80% of the populations daily driving.
The rest is history (in the making).
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July 10th, 2009 at 7:36 am
I heard they my change the GM logo to green. I like that.
And I’m glad Bob Lutz is staying, He is truley a car guy.
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July 10th, 2009 at 7:37 am
With Buick as the highest quality nameplate in the world GM is off to a good start.
http://www.autoblog.com/2009/03/19/jaguar-and-buick-upset-lexus-in-j-d-power-2009-vehicle-dependab/
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July 10th, 2009 at 7:56 am
40 days? Sounds kinda Biblical don’t it?
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July 10th, 2009 at 8:04 am
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July 10th, 2009 at 8:07 am
Regarding Bob Lutz staying on beyond retirement, I know a lot of people here have strong opinions of the man, but I sort of feel a little better about the design future for GM cars. We can all think of some successes and some failures that have come out under his watch. But few can question that the guy lives, breathes, and eats car design. I just feel a little more comfortable knowing he’s at the design helm yet.
Let the rain of “minuses” come to this post I guess, but that’s just the way I feel on that.
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July 10th, 2009 at 8:22 am
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July 10th, 2009 at 8:25 am
I’ll add my good wishes and thanks that Bob is going to continue with GM. He’s old by the calendar, but younger than most of us here.
Come on GM, focus on the Volt and it’s iterations and get it right the first time (and early would be nice too).
Be well,
Tagamet
LJGTVWOTR!!***********NPNS
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July 10th, 2009 at 8:26 am
I was thinking the exact same thing BobS. Hoping there is a rainbow at the end of these 40 days as well.
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July 10th, 2009 at 8:31 am
Statik Day, 2.0
Statik, now that you have been proven right on almost every prediction, will you please come with me to Vegas? My day job is too much work!
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July 10th, 2009 at 8:41 am
I’m glad Lutz is staying.
I bid $32.5k on a 2010 Volt.
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July 10th, 2009 at 8:57 am
That begs my first question, will Volt be one of the cars they are willing to auction? At present Ebay doesn’t limit where people are from in buying where the item is for sale. It sounded like GM was going to limit the experiment to California. Any ideas?
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July 10th, 2009 at 8:59 am
GM has the robe and sandals. Now R&D and manufacturing need to produce a combination walking staff/umbrella.
=D~
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July 10th, 2009 at 9:02 am
Fritz had two significant comments in his news conference.
1. There are going to be other vehicles in the Orion Plant.
2. He called the Volt a Pre-production vehicle. I suspect it is actually a prototype and the preproduction would occur around January. Or the release is advanced!!!!!
Also a Millwright commented on this site a couple days ago that construction at Orion was in process. Normally, three to four months are required so the preproduction should be on production tooling and processes.
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July 10th, 2009 at 9:02 am
This is quite a remarkable achievement. The NY Times ran a story this week at how the speed of these bankruptcies had shocked expert bankruptcy attorneys. However, in handing out kudos, let’s remember that GM mightily resisted bankruptcy. The credit goes to the Obama Administration. As much as some people here don’t like it, that’s the objective reality.
Bob Lutz’s staying is good news, even though he’s not the most popular guy either. He doesn’t get the coasties, and he may be missing a trend away from conspicuous consumption to conspicuous greed creed, but he still brings a unique understanding of the car business to the table. Plus he sold his GM stock when that was obviously the right thing to do so he’s no fool!
As for the Volt being the centerpiece of GM’s recovery. last month GM sold about 10,000 Camaros. Isn’t this about the first year’s production of the Volt? Given the Camaro is considered a niche car, obviously the electrification of transportation isn’t happening anytime soon.
Let’s also recognize that, going forward, GM’s process of shedding brands, models, and dealers will result in poor year over year numbers. That’s just the math of the reorganization.
Finally, the eBay partnership could be interesting. Very interesting. Hopefully GM will learn a lesson from the bankruptcy and will be bold rather than wimping out at the last minute and delivering a half baked compromise that makes neither its dealers nor its customers happy. Looking forward to more details on this one. Maybe we can get our Volts on eBay!
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July 10th, 2009 at 9:15 am
Meet New GM…same as old GM, heeh.
My whipping boy…and his pink tie lives on huzzah!
I’d say Bob is just about the least adaptive person at GM. Now he is vice chairman of ‘creative elements of products and customer relationships,’ lol. The problem is the man builds cars that he wants to drive, and not what people want (at least not what people want at a price they are willing to pay).
Lutz builds cars people like to look at at autoshows, but don’t buy…that SHOULD be his job. Vice Chairman of ‘auto show concept cars’ because thats really what he wants to do…just don’t let him greenlight anything, and let him keep the cars when they are done with them.
Like him or not, there is no questioning that he is the man most responsible for the abysmal GM product lineup (40% of which is getting canned and/or discontinued), and the relentless reskinning/rebadging that goes on, and he is directly responsible for the total lack of strong hybrids. He greenlit the Solstice hardtop for crying out loud (after the economy tanked), what is up with that? Oh yeah, he wanted one thats right (he gets VIN #0001)…then the line shuts down after only making 1,000 copies.
/sigh
…but I do look forward to more crazy statements, and lots more ‘add on’ body moldings on ‘New GM’ offerings.
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July 10th, 2009 at 9:17 am
Every prediction? While he certainly advocated the government sponsored bankruptcy, if I remember correctly he also argued that the bondholders were being treated unfairly and that the court would reject the DIP’s reorganization plan and rule in their favor. In fact I remember him explaining how the attorney for the bondholders was swatting away every argument put forth by the government, creating such a slam dunk that the government’s only hope was to hire him.
Needless to say it didn’t exactly turn out that way. In fact more or less the opposite.
In truth the only people who got this right were the members of the Presidential Task Force. They completely nailed it.
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July 10th, 2009 at 9:17 am
“Maybe we can get our Volts on eBay!”
Isn’t this the perfect solution? The first 1000 Volt sold worldwide via eBay auction. This will satisfy GM’s need to make money on Volt sales. And will allow anyone to be first in line. I wouldn’t be surprised to see winning offers in the $60,000 range. A huge buzz topic for news programs bringing free advertising.
They should hold a special auction for VIN numbers 1-10.
Whoever thought of this should get a $60,000 AIG bonus.
=D~
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July 10th, 2009 at 9:40 am
This is brings up a lot of interesting questions scenarios, I’ve thought about this myself.
I think they should be doing it at the same time while the getting is good. I mean why not…where is the down side here? lol. All the dirty work of breaking contracts and steamrolling is done, and precedents have been set (hardly anyone put up a fight on GM after watching Chrysler get ploughed through)…but how do you rationalize it, when Ford has enough scratch to still ‘give it a go’ for another 9-10 more months?
I don’t think there is a easy answer here. In the future the will of the administration to do this process again may not be as strong, or the path as easy, but Ford is definitely ‘running downhill’ into this same situation.
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July 10th, 2009 at 9:47 am
About Bob Lutz–I’m glad he’s staying on because I think that with him there, they’re more likely to stay on track by producing good cars. GM’s definately improved their product line-up under his watch, and continuity on that point is crucial to their success.
I’m nervous about putting him in charge of marketing. He’s not exactly known for his tact. However, their marketing and customer relations departments could definately use a complete overhaul. If Lutz can pull that off–GM’s got a decent chance off success. At least I hope so.
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July 10th, 2009 at 10:02 am
Is the Prius a rich person’s car?
Toy lost money on the first few years production on that one too.
GM is dong fine here.
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July 10th, 2009 at 10:04 am
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July 10th, 2009 at 10:04 am
New technology costs money.
I’m one of those who will buy.
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July 10th, 2009 at 10:08 am
Now that they have turned around financially,
then need to turn around productively.
Build cars, not junk.
Build cars people want to buy.
Make super quality cars and drop the perception you make crap.
Americans will buy American cars once they become convinced the quality is there. This of course means the Press needs to be on-board. They only way to do that is too make superior cars for a lengthy amount of time.
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July 10th, 2009 at 10:10 am
LOL…….
Friggin Bob Lutz!!!!!!!!!
Fuel for Statik’s fire……
That was about all i read every other statement when i first tuned into this site.
Have fun Statik..
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July 10th, 2009 at 10:10 am
I’m not sure I understand in the article that the Government wants the New GM OUT of the car business. How can you be out of the car business and build cars? The article on this issue maybe to much information. I am sure with the government calling the shots that it will be well screwed up. I am pleased that GM has a new and clean start but it has to remember, GM was the prime destroyers of “GM” in the first place.
If the old habits start seeping in with the idea of doing just fantastic and the Union needs a few more thousand concessions and the executies need their well deserved “Out of the ball-park” bonuses, GM will be back to normal.
In due time all this today will have past into history and old habits creep in. I am also pleased that the VOLT is the Flagship car of the new GM. Hope it stays that way.
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July 10th, 2009 at 10:11 am
Of course I have no way to know for sure but I bet the IPO will be the (various) governments exit strategy
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July 10th, 2009 at 10:11 am
Hey look what I found…it’s a big bowl of sour grapes. Not only is your post petty, your also completely wrong. This was my prediction for Chrysler the time:
—
#19 Statik said:
May 2nd, 2009 at 11:05 pm
Onto Chrysler’s filing itself.
The gov’t is saying they are going to try to do this in 30 days. Well, still no 363 motion…and they can’t get back in there until the 4th. So at best they get a hearing for the last week of the month, (NY local rules require 20 days notice).
#26 Statik said:
May 3rd, 2009 at 12:07 am
I mentioned this earlier, but the plan is to go 363…and to sell all the good assets to NewCo (which will be renamed Chrysler after the process is over), but you have the sticking point of a 20 days notice period. They still haven’t got the motion in, because the gov’t is…well the government. At best the hearing is the 25th. No chance we see a resolution that would threaten the GM bondholders to capitulate by the 31st. (in my opinion)
http://gm-volt.com/2009/05/02/the-fall-of-chrysler-could-be-model-for-reshaping-gm/
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Then you came back, totally unsolicited (like here), and posted this snotty comment a week later when you heard something that said they might have a shot:
DonC said:
May 8th, 2009 at 9:32 am
In other news, it looks like statik’s prediction for the Chrysler bankruptcy was completely off-base. While the opposition looked dead after the court ruling this week that set a May hearing date on the sale, that sale now looks like a done deal.
Two more bondholders have dropped their opposition on grounds that the dissident group did not have sufficient holdings to influence the outcome (basically 4%). While the numbers aren’t known, Oppenheimer Funds and Stairway Capital Management, the two bondholders withdrawing their opposition, have been assumed to be the largest holders.
/Game Over
http://gm-volt.com/2009/05/08/gm-planning-all-electric-city-car/
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Only, guess what? It didn’t happen. As we now, you were completely wrong because it indeed took FORTY-TWO days to complete the Chrysler bankruptcy. Did you admit to being wrong, after I patiently waited for the time to expire? Nope, this is what you said, (AFTER calling me out):
DonC said:
June 8th, 2009 at 11:30 pm
“As to the question of how many days the Chrysler bankruptcy has taken, this is really your issue. My clock stopped when the Oppenheimer funds withdrew their objection on May 8th.”
http://gm-volt.com/2009/06/08/gm-opens-global-battery-systems-lab/
As for ‘advocating’ the GSB (government sponsored bankruptcy), I was saying (and detailling the plan) before it even had a name in novemeber.
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Do you ever get tired of getting owned by me? I hope not, because I am actually starting to enjoy it. I like the times when you just make up history, forget facts, make wild claims, disregard comments that hurt your case, and never use things like sources or links…then when I do, you say, well that doesn’t count because my mother told me I was special, or they didn’t really mean it, or I ‘interpreted’ that to mean this, lol
PS) If you want to be accurate about something I have didn’t get right, although I called the GM bankruptcy, GSB, etc., I thought the process for GM would take at least 60 days because they were so much larger/complicated than Chrysler…but they only filed in US, for US assets, so it took a couple weeks less. So I was off on that one.
See it is easy to admit when you are wrong…maybe you should try it sometime, like say on this post here would be a good start.
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July 10th, 2009 at 10:13 am
Green logo for the ‘green’ cars… Volt, Tahoe hydrid etc…
Keep the Blue for the conventional cars.
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July 10th, 2009 at 10:16 am
Errr, you sure sound unbiased…
Is that No Name again?
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July 10th, 2009 at 10:17 am
All right-I have to ask. When did dealers start taking deposits on the Volt? I know I went on vacation, so I might have missed something, but I would think that that would be big news? And I just went through the past three weeks of Lyle’s posts.
Was it a New York Times misprint? (Check the last sentence.)
http://www.nytimes.com/2009/07/10/business/10auto.html?em
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July 10th, 2009 at 10:19 am
Welcome back GM …..
….. Now get me my VOLT
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July 10th, 2009 at 10:20 am
I have a large family stretching from California to Massachusetts to Maryland and down to Georgia. We had 370 show at our last reunion.
Many currently own or have owned Buicks. Never heard a complaint. Regular oil changes and 150,000 miles between trade in are the norm.
=D~
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July 10th, 2009 at 10:25 am
He was right about a)the bondholders being treated unfairly, and b)that the administration’s plan violated the established law and precendent. (Not that precedent is binding in bankruptcy court, but it’s still important.) The Chrysler deal in particular violated the established codified letter of the law about who gets priority in a bankruptcy proceeding.
You, yourself, cited the New York Times article saying how stunned bankruptcy experts were.
http://www.nytimes.com/2009/07/07/business/07bankruptcy.html?scp=1&sq=gm%20bankruptcy%20shocked&st=cse
As far as I’m concerned, Statik’s only mistake was having too much faith in the bankruptcy court judge’s allegiance to the law.
Personally, I’m impressed that the administration managed to pull it off. But I really doubt that the way they did it will be good for the country in the long run.
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July 10th, 2009 at 10:26 am
As much as I’d like to have a new Camaro it is a standard car.
There is absolutely no comparison between the complication of building a new car on existing technology and leading edge tech like the Volt.
10000 Volts the first year is a smart and achivable goal!
Somebody get Bob a ‘Latte… it’ll help him with the coasties!
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July 10th, 2009 at 10:26 am
Then again, it’s not easy to find super talent hanging around. How do you find a Steve Jobs? Lutz can fill in while they hunt for that one person that can inspire GM and it’s employees. I think great companies need that one leader. That Jack Welch, Bill Gates, Michael Dell, that Sir Richard Branson. Who will step up to the plate?
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July 10th, 2009 at 10:27 am
If Bob Lutz’s legacy is an “abysmal lineup” such as the new Malubu, CTS, Enclave, Equinox, and most importantly the upcoming Volt, I don’t see what’s wrong with that.
I think it’s great that Bob Lutz is staying on. He has a passion for cars. He lives and breathes cars. He’s interesting to listen to to boot. He’s like a beloved grandpa who, when he talks, people shut and up totally focus on when he has to say.
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July 10th, 2009 at 10:27 am
I haven’t heard a thing about GM taking deposits for the Volt.
I think it probably is a misprint (another journalist that doesn’t really know what they are talking about). Mr. Wilbur probably said he “wanted” to put a deposit on the Volt.
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July 10th, 2009 at 10:30 am
Um, Larry… I think that should be read that the Government(s) want to get out of the ownership business. (There are multiple countries involved here.)
I think the upcoming IPO will be the way they exit.
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July 10th, 2009 at 10:30 am
GM doesn’t build junk. Words like that propagate the myth more.
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July 10th, 2009 at 10:31 am
Too funny,
You got me, I do love to say ‘friggen Bob Lutz, its a sinful pleasure
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July 10th, 2009 at 10:32 am
Unless the cars were first sold to dealers and the dealers auctioned them off I don’t think this will happen, the dealers would have a fit if they were cut out, and I don’t blame them.
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July 10th, 2009 at 10:32 am
Don’t get me started with “sophisticated” latte drinkers.
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July 10th, 2009 at 10:34 am
Oh God!.. you just jinxed the Volt
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July 10th, 2009 at 10:36 am
Having GM management actually appear at dealers is great. I’m sure it will stir some excitement in the air at the dealers since their ideas may have a chance to change the way the company works. It’s sort of like the honour having a chance to talk to the President (or Prime Minister!) of a country to initiate wholesale change.
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July 10th, 2009 at 10:42 am
LOL! I’m WAY inland and I still like the odd ‘Latte!
(of course I’ll just say I got a ‘coffee’ and leave the lid on….)
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July 10th, 2009 at 10:43 am
My suggestion would be for GM to ship them to dealers who offer a purchase order tied to a specific buyer. Anywhere in the world.
Dealer must send a tech to GM to learn about the specific Volt service needs with the PO
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July 10th, 2009 at 10:44 am
Bob wanted the concept car and a pure BEV…I’m not sure this is anywhere near the product he had in mind.
The Volt as it is now, is perhaps a great idea, and may prove to be very successful in the future, I fully accept that…but Lutz’s job was to build/design cars that GM could get to market and sell for a profit. The Volt was neither of those things in January of 2007.
The Volt, was born with no plan of payback, and was a very expensive undertaking…by a company with very little time or money left to actually make it a reality. It was just about the most misplaced product they could have come up with.
Spend a billion or two dollars, on a project that won’t even come to market for 4 years? And even then in very limited quantities, with ‘maybe’ a payback in 10 years (from 2007), from a company that is losing 10 billion a year, with only 28 billion (at the time) left in cash or lines of credit.
If not for some terrible economic times, the Volt, along with GM, with Bob Lutz spearheading the charge would have been put out to pasture last december. And don’t you know if GM would have gone under a picture of Lutz leaning on a HUMMER would have been front page:
http://blogs.edmunds.com/greencaradvisor/lutz2.jpg
http://www.2405.com/press-library/Hummer-H2H-Concept-2004/arnold-schwarzenegger-and-hummer-h2h-concept-2.jpg
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July 10th, 2009 at 10:45 am
Oops! That should read Tahoe Hybrid… time for more coffee!
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July 10th, 2009 at 10:47 am
True enough, unless the ‘winner’ picks a local dealership as the delivery point so the relationship can be established.
I’m sure that will work for all involved.
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July 10th, 2009 at 10:48 am
You should go in a Buick dealership. I think you would then change your mind. [Of course you may think 40 is old] If so then continue to spout your garbage.
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July 10th, 2009 at 10:50 am
“Now that they have turned around financially…..
—————————————-
Did Fritz or anyone say when NGMCO expects to be profitable? That is, which quarter, or which year?
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July 10th, 2009 at 10:50 am
189,783 miles on my 99 and no complaints. And I intend to keep it till my Volt arrives!!
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July 10th, 2009 at 10:54 am
What happened to world peace? just kiddin’…BOTH BARRELS! LOL
/sweet
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July 10th, 2009 at 10:54 am
There were 4 GM dealers in range of where I live. It appears that 2 are staying (same owner), and 2 are closing. The 2 that are staying belong to an owner with a history of legal trouble and terrible word-of-mouth. The 2 with reputations for honest dealing and excellent service (one good, one outstanding) seem to be closing. I hope there is a more positive story about GM dealerships in other places.
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July 10th, 2009 at 10:58 am
Are suggesting that the 20ish MPG Tahoe Hybrid gets the green badge, and the possibly-40 MPG Cruze doesn’t?
Being a Hybrid doesn’t make something Green.
Using the right tool for the right job is much more important.
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July 10th, 2009 at 11:02 am
Is there something codified that says ordering and amount can’t be established prior to bankruptcy and a judge can’t accept the results as part of a 363 sale?
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July 10th, 2009 at 11:05 am
Not a bad idea.
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July 10th, 2009 at 11:05 am
Start —- This should be fun!
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July 10th, 2009 at 11:07 am
Is that comment Aveoble for serious discussion.
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July 10th, 2009 at 11:10 am
The big question remains: Does The New GM have the cash flow to sustain operations?
I notice that Henderson didn’t say anything about that. Perhaps that’s no the normal venue for it but, given GM’s “unique” circumstances, a bit of reassurance on that front would be valuable.
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July 10th, 2009 at 11:10 am
statik said The Volt, was born with no plan of payback, and was a very expensive undertaking…by a company with very little time or money left to actually make it a reality. It was just about the most misplaced product they could have come up with.
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My impression is that, at the time the Volt was conceived, Bob Lutz was hoping for a much lower-cost higher-volume Volt than now seems to be the case. He was in a situation where GM products were boring, and he was trying to create some excitement. Knowing all we know now, his cost projections were too optimistic, so we can fault his ability as an analyst. However, at the time he acted, the GM product outlook was so bleak that I think he at least created a sense that GM could once again bring to market some exciting products.
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July 10th, 2009 at 11:10 am
Thanks! I couldn’t believe it when I read it.
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July 10th, 2009 at 11:12 am
Actually 20 mpg from a vehicle that can pull a small house is pretty bloody impressive! Comparing a 40 MPG small car to a full size truck is simply rediculous.
My thinking on suggesting the break is the switch from conventional to new technology. In this light and in my opinion a conventional gas Cruise does not get the green badge.
This is NOT to say that I don’t like the look or the possible/likely efficency of the Cruise, in fact I will likely get one for my son for his commute to University next year.
My Volt, well OK… my WIFE’S Volt will get the green badge.
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July 10th, 2009 at 11:16 am
Statik, just ignore Don C – most of us do.
Don C is GM-Volt dot com’s resident BS dispenser – you want BS, you read DonC’s comments. If there was any doubt left, he erased it when he said:
“In truth the only people who got this right were the members of the Presidential Task Force.”
With that comment, he lost every last piece of credibility he had left. Just put DonC in with the rest of the trolls, and move on. I know his words hurt, but no one on this site takes him seriously. Just ignore him, and let his anger slowly eat him alive. At least you have something important to say.
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July 10th, 2009 at 11:16 am
The new GM has precisely the same problems as the old GM. This will become crystal clear when the first of these “survivor” brands
heads downward. Then we will all see that the key to maintainability is NOT to have fewer eggs in your basket. Reducing debt by reducing the size of your company is no solution to anything – now GM is far more vulnerable to changes in tastes, since it has only a couple of flavors. And screwing the bondholders at the expense of company insiders is not the way to ensure future investments. GM is a toxic asset at this point – no one believes they will prosper, especially those who have the ability to see the Chinese version of the Volt as a can’t-lose proposition and the Volt as a car that has lost what atractiveness it once had via the restyling, and now finds itself woefully inadequate in terms of electric driving range, and price. By the time the Volt hits the streets, BYD will have a full year of real world testing and not one, but two models that can clean GM’s clock on the Volt. And developing an even more expensive Volt strikes me as a good indication that GM is committing industrial suicide with their braindead decisions. Fritz is building cars to please the govt that gave him his job-now he’ll find out the hard way that he needs to build cars to please his customers, and that includes a reasonable price, which he can’t deliver – he’s got the UAW to feed.
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July 10th, 2009 at 11:18 am
Mmmmmm, expresso is my friend!
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July 10th, 2009 at 11:21 am
I really like the ebay idea!
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July 10th, 2009 at 11:23 am
The Chinese. Who cares if Americans buy them when they are the ultimate status symbol there.
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July 10th, 2009 at 11:24 am
#2 old man said:
Second and possibly of more interest to me is Statik’s view of the expected I P O? I would think of it as a good investment [if] THE STOCK WE ARE BUYING IS THE GOVERNMENT OWNED STOCK. I don’t want the gov to be my forever partner in an investment.
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I really can’t say, even guess, as to the value of a GM IPO. There is two major issues to determine before rating it as investment grade or not.
The first is that it is a fair good distance away, and a lot of the valuation of any car company right now is the environment/landscape they find themselves in (especially given GM’s supposed limited bankroll).
If we have a SAAR clipping at 9 million and trending downward, and GM still losing 1-2 billion a month going forward…it isn’t worth a penny. On the other hand, if the SAAR has rebounded, or even somewhat normalized to a level of 12-13 million (which I think is a truer baseline number for profitability) and GM has retained its market share and the ‘leaner, meaner’ story is playing out as envisioned, totally different story.
The second is pretty simple/basic fundamentals. What are they valuing the company at? And what is it worth?
The issue of whether you are buying the governments share or not, probably is not a factor at all in the valuation in the company at the time. Although, one could actually argue it either way, that without the government(s) involved in ownership, the piggy bank has left the building, but with them present, there is too much oversight and meddling and they are hamstung.
Nutshell: Lets just wait it out, see how the next six months go, and form a fresh opinion. (I’d just keep sitting on my money…make that guaranteed 3-4% and be content to make a buck or two until this whole mess blows over…or just dabble with a little bit to amuse yourself, lol)
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July 10th, 2009 at 11:36 am
/sample size
The problem isn’t those, it is the other 40-odd cars/truck. I’m not going to list the ‘failures’ but trust me, it isn’t hard to name 2 failures for each success.
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July 10th, 2009 at 11:38 am
Whew!
From what I see the duplication has been all but eliminated the product lines. Yes losing Pontiac is sad but with the exception of the G8 and the Solstice they were just badge engineered Chevy’s.
If you what a BYD anything you go right ahead! We need some new Darwin award nominee’s for next year anyway.
I for one MUCH prefer the updated Volt styling. (In silver blue)
I give you the UAW point, that`s the bit of this thing that has me nervous. I simply do not trust the UAW.
The Gen 1 Volt like almost every Gen 1 product will likely not make very much if any money. But until you get the product out into the world you cannot fully determine where costs can safely be cut.
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July 10th, 2009 at 11:42 am
According to the bankruptcy code as written, secured bondholders get par before unsecured creditors get anything.
http://www4.law.cornell.edu/uscode/11/usc_sec_11_00000507—-000-.html
Chrysler’s secured bondholders got roughly .30 cents on the dollar. The UAW veba debt was unsecured, so they shouldn’t gotten anything. But, in exchange, they got got 55% of of the new company. And they got to keep the rest of the Veba debt as debt, which will be paid starting in 2010–well before anyone thinks Chrysler might be profitable. (Although I personally doubt it ever will.)
http://www.reuters.com/article/newsOne/idUSTRE53R08T20090428
http://www.nytimes.com/2009/05/05/business/05bankrupt.html
A 363 sale is fine. But the bondholders should have gotten everything associated with it. The UAW certainly didn’t pay for the assets–the government did with loans
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July 10th, 2009 at 11:46 am
So, I have to ask again. In the past GM has stated R&D funds are recovered through sales. Since they wrote off the debt spent on R&D, will this result in a slightly lower cost for the Volt? Also, since the Gubment is part owner of the Volt, will they just reduce the price of the Volt by $7500 instead of rebating it?
lol……yeah, I’m a cheap bastard!
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July 10th, 2009 at 11:52 am
If they’re Gobment Motors, then they should make a Gubment stripped version….
No Power Windows
No Power Adjust Seats
No Power Side view mirrors
No Power Sunroof (Actually No Sunroof at all)
No Power Door Locks
No Power Trunk lock
No Radio (Remember that fiasco? – Get an iPod)
No Heated Seats
No MuthaF@#$&# OnStar!!!
Make the garbage I listed, but another mans treasure, an “Upgrade” for those who want these creature comforts.
Standard Features:
4 Wheels
Highway Capable
Power Windshield Wipers
AC
Heater
Defogger Front/Rear
Cupholders for Big Gulps!
The ICEAge is over, Embrace the VoltAge.
I’ll take my Volt with No Generator, No ICE, ShAkEn not StirreD…
YeeeeeeeHAW…
Lets GitterDone boys!
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July 10th, 2009 at 11:53 am
Of course it`s WAY too soon to call your broker.
(OK, `click`your Broker)
But I do see it as a nice clean open market way for the government(s) to exit their Positions in GM.
(I don`t want Harper Motors any more than I want Obama motors!)
As you say to make this work they (GM Management) have to get their house in order which it most obviously is not at the current time.
I see GM`s powerful manufacturing engine to be it`s core strength but at the very same time it`s greatest weakness. There are large internal costs that need to be cut out to make the big picture and this includes hardware AND personel costs. Will the UAW play nice? Will the engineers have the tools required to cost reduce the Volt (and other products) so a lower MSRP with a profit will be realized?
It’s going to be a heck of a ride.
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July 10th, 2009 at 11:57 am
Lol…no.
But what he did say is that their goal is to pay off the entire 50 billion (ish) loan before 2015, hehe. So they must be planning for a whale of a 2014 fiscal year.
It is in Lyle’s thread, but here it is again,
“We expect to take the company public again as soon as practical, starting next year, and to repay our government loans as soon as possible. We are required to pay off the loans by 2015, but our goal is to repay them much sooner.”
Official GM statment (again…same as Lyle’s ditty, but with GM letterhead, lol)
http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewpressreldetail.do?domain=2&docid=55577
/curiously, no mention of unicorns in his statement this time
(Profitable is one thing, 50 billion in repayments in 5 years? Totally another story)
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July 10th, 2009 at 12:02 pm
Good Morning Cap’n!
You just stripped out my car man… whutcha doin???
Heated seats ROCK!
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July 10th, 2009 at 12:03 pm
Bob Lutz? Bob Lutz??!!!?? Good God! So the newly slimmed-down thunderlizard known as GM continues its oblivious same-old same-old, while the meteor zeros in and tiny mammals feast on its eggs.
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July 10th, 2009 at 12:13 pm
As much as I admire Alan Mulally, he was hired by Bill Ford. And the Fords want to keep control over the company at all costs.
Besides, IMHO, they do have an actual shot of pulling this off. Not taking government money has been a public relations bonanza for them. Their market share is way up–they’ve already passed Toyota. If the auto market rebounds, they might even be able to earn enough through equity offerings and sales to turn the company around. I wouldn’t bet on it, but it’s still a chance.
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July 10th, 2009 at 12:15 pm
That’s my trim option bro!
When I commute to work for my 10miles one way, I don’t need all that stuff. More crap to break down in the future. I keep my cars well over their loan tenure. The majority of what I mention have broken down at least once or twice in my cars lifetime of both my 97 Saturn and 2002 Ford explorer. More so on my explorer, go figure.
I’ll bet if you have a dealer with my ghetto trim with appropriate pricetag and a moderately trimmed with appropriate pricetage with 6 of each, the ghetto trim gets scooped up much faster. That’s always the case. Why they won’t do it to sell the numbers, I dunno.
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July 10th, 2009 at 12:16 pm
I really like the part about the IPO next year with the government bugging out.
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July 10th, 2009 at 12:23 pm
EDIT: Nice points Laura, I started to work something up on the process, but that is plenty good.
(=
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July 10th, 2009 at 12:27 pm
Kahlua and Cream coffe!
Yeah baby!!!
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July 10th, 2009 at 12:35 pm
Good luck to them! This time I will try not to cause them company by trying to invest in them…I have terrible luck, every time I *think* of investing, the company goes out of business. It’s gotten so bad I even made a comic about it…
http://grantpilkay.com/comics/Dpost.JPG
Unless you’ve read “Death Note” this comic will make no sense.
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July 10th, 2009 at 12:42 pm
Correct me if I’m wrong. Because I’m no expert on the auto industry–but pre-Lutz, GM had no cars anyone would want to buy? Trucks, yes. (And they still have those?) But no cars.
So, a 33% “hit” percentage is better than a 0%? And at least it’s a step in the right direction?
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July 10th, 2009 at 12:46 pm
statik — I heard him say they would pay all the government loans back early, but I immediately discarded that as PR for today’s occasion. I was wondering when, in his judgment, GM might again be profitable, even if just slightly so, and I guess we got no information on that. Maybe Fritz did the right thing, leaving the situation as a grandiose vision with nothing realistic to be measured against.
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July 10th, 2009 at 12:48 pm
Learn from Camaro and don’t make a deposit. Officially it will be a deposit for the cars to that dealership ONLY. When there are Volts for sale, go into any dealership that has one and make an offer then.
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July 10th, 2009 at 12:51 pm
Do you remember Waggoner saying that GM had the cash to make it through 2009?
Maybe an IPO next year, likely not.
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July 10th, 2009 at 12:51 pm
I don’t know what the future will look like when this product is released but at over $40K many will not be able to afford this car. I bet only half of those on this waiting list will be able to afford it after all is said and done. Considering this list started when the guestimated price as around $30K, I think my point is valid.
Sure 24,000 of you will buy it but at one point you buyers will run out. Considering this product is slated as a loss with no projection of profit, what’s GM going to do for money to pay back vendors or even the government?
The job market is down, economy sucks, speculators say 3-5 years till recovery. GM needs this product priced closer to the $30K before the rebate or as one other mentions to just take it off the price.
Seems to me the same GM that grew into their big mess will eventually grow the same cancerous bulge. I just don’t think there’s enough people to put their money where their mouth is when it comes to getting off of foreign oil. Yeah I know the 20 of you most common posters can but let’s face it. That list has shrunk since it’s inception and that is not enough.
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July 10th, 2009 at 12:52 pm
I’ve bought the as you call it ‘ghetto’ trim on a couple cars and regretted it because I KEEP my cars for a long time.
I now buy the loaded ones but I understand where you are coming from. Previously purchased ’strippers’… 88 Olds Cutlass Calais Quad 4 powered and no extra’s except sunroof, damn thing COOKED us in the summer! 02 Subaru Impreza TS, base car has air… the car still runs like a top but the base seats are just terrible and have been from day 1.
My Land Rover Discovery has the most incredible seats I have ever owned. This is one of those cases where premium really IS worth it.
Buying the upgrade model on a car purchase is a given in my world now.
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July 10th, 2009 at 12:54 pm
Hey, weird thing I noticed this week. I saw at least 4 brand new big a$$ed Suburban SUV’s. Seems people are buying them up due to :Fire sales” I guess. Saw only a 90lb MILF driving it with her 2 kids. Does one really need a 5500lb car to get around like that?
Sheesh.
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July 10th, 2009 at 1:01 pm
Yeah, I bit the bullet and did that on the 2002 Ford Fukin pieceosh|t Explorer. Man this thing is just fallen apart left and right. Now the friggin power side mirrors main knob fails intermittently.
Too many things to list that broke. I replaced most of them from OEM parts “Made in Mexico”.
As for a sunroof, my 97 Saturn has one, leaks like a mofo. Definately will never ever get a sunroof.
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July 10th, 2009 at 1:06 pm
I do see your point.
However every new technology has a first generation of production.
The world NEEDS early adopters to drive the price down.
I’m willing to bet that you didn’t buy a flat panel TV 6 years ago.
I didn’t either! But I have one now.
Voltec is the same way, some of us will buy the car at the initial higher price knowing full well that the experience gained through our purchases will be used to cost reduce the second and later generations of Voltec drive.
I’m willing to bet that the Gen 3 car will be down to the mid-high $20k’s retail, with profit in the mix. No so ironically like the Prius’ experience.
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July 10th, 2009 at 1:07 pm
I hear what you are saying, and I’ve mulled it over a few times myself, but I just can’t come to the place where I believe it can happen.
As you and I know, Mulally mortgaged the farm to get the cash pile they are burning through now. Sure their market share is up, but those are percentages, not dollar bills…largely at the expense of a wounded and understocked (of popular vehicles) at GM/Chrysler. Ford was burning tens of billions when they were selling 50% more cars than they do now, I don’t see where they hope to right the ship on so much less revenue.
Moreso than that is the consequences of the GM/Chrysler bankruptcy (that you were talking about elsewhere in this thread).
I don’t think the public market is not going to have any confidence to fund these guys, and I am just talking about old debt…not future working equity. Ford has MASSIVE debts/obligations coming due shortly. (several billion in early 2010) and their 10 billion credit facility matures in 2011. All that being said, they still have to service the 230-odd billion in liabilities they are carrying,
I have difficulty seeing how they stop the bleeding, at least without a huge market recovery (they do get some benefit from contract capitulations given to GM/Chrysler, that were extended to them)…but how do they service the debt? The only place I see they can get the cash, and a magic wand waved over their debt is Uncle Sam.
To me, Ford should be begging to be put through the process now, or at least get a committment that the same courtesy that GM and Chrysler got will be extended to them when the time comes. If GM and Chrysler are really going to be the ‘hotness’ and will be able to compete with the big boys (Toyota and Honda) like everyone says…how does Ford survive in that universe, as is?
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July 10th, 2009 at 1:14 pm
I hear you Jack. Many new big GM vehicles seen here in Southern California as well. I talked with one owner, a sheriff, he said he got a terrific deal on a left over 08′. Have seen many new Pontiac G6 and G8 as well. Also a flood of Honda Fit and Mini Cooper.
The temptation of buying BIG due to short term $59 oil is alluring. The pain of spending $200 a week on gasoline will be hitting home sooner than later.
Four things are for sure. Cher will survive the apocalypse. Egg sucking trolls will always be a part of GM Volt dot com. Bob Lutz will keep wearing pink ties. And the price of oil will rise as the world economy recovers.
I will now retreat behind the safety of a wall and eavesdrop with my bottom cut styrofoam coffee cup. Happy golfing all.
=D~
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July 10th, 2009 at 1:16 pm
Glad to hear that Bob Lutz is back at GM in a new role. I bet he’ll be one of the people who goes on CNBC and Fox Business and does interviews and talks about the latest and greatest GM vehicles, etc. He’s pretty good on TV.
He did good on the Dave Letterman show a few weeks ago. I hope I’m still kind of “cool” like Bob Lutz is when I’m 76 years old. He seems like a guy in his 50s or so. He must have exercised and ate healthy food all his life or something. Let’s hope Fritz and Bob and the rest of the management team turn around GM’s fortunes BIGTIME in the next few years. They have their work cut out for them if they are going to be around for another 100 years. I bet Bob Lutz will still be talked about at GM’s 200 year anniversary in 2109.
Gentlemen start your (electric) engines …. let the next century of the “New GM” begin.
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July 10th, 2009 at 1:18 pm
The sunroof thing is funny…
I’ve had lots of them only once had a leak, a stick was stuck on the seal… opened the roof (in the pouring rain) removed it and not a drop afterward.
I think you are jinxed!
2002 Explorer… where does one start?
Those years were BAD for that model…
Brother-in-law has one too and is on a first name basis with the dealer…
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July 10th, 2009 at 1:22 pm
lol…
Yeah, I’m on the list but beacuse these gotDamn furloughs and other concessions, I can no longer afford a Gen 1. Sucks because it will be the one with the most batt pack stuffed into it. I believe later version will have “abbreviated” ones.
An I still don’t have a Flat Screen!
Does my laptop screen count?
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July 10th, 2009 at 1:32 pm
Actually the laptop DOES count!
The price of that puppy is what it is because some crazy rich bugger bought a $20k plasma several years ago driving the market.
I won’t draw a line in the sand on the battery pack since I really have no idea! However, I bet that they will concentrate on dropping the cost of the pack and the rest of the car rather than the capacity. (Based on the continued 40 mile AER claims)
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July 10th, 2009 at 1:46 pm
In 2000, GM sold 2,531,734 cars (4,953,163 total vehicles)
In 2008, GM sold 1,257,481 cars (2,980,688 total vehicles)
Cars fell off 49%, trucks 29%
So far in 2009 (through 6 months):
GM’s cars are off a further 41.6% year over year, with total sales of 402,530 for half a year
…that would put them at 734,358 at the end of this year
…down 71% since 2000.
I suggest to you that someone would have been hard pressed to do much worse than these numbers. I certainly can’t see anyone saying, “Good job”
To equate/smooth this to overall market conditions, the SAAR in 2000 was about 16ish million units, a 71% drop would be equivalent to a 4.6 million SAAR today. (It is currently at around 9.7-9.8ish)
(Fair disclaimor: October, November and December were total apocalypse last year, so I can see them being down 41.6% off of those terrible numbers…I’d say they end the year around 850,000)
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July 10th, 2009 at 1:46 pm
I think they are banking on that huge market recovery. I don’t think it’s likely that it happens, but it could. If that happens, they should be able to raise a few more billion from equity offerings, which would buy them some time.
Besides, I think Ford might be able to roll over at least some of its debt. In spite of the government’s railroading of the bondholders for GM and Chrysler, S&P did give them that upgrade. (I don’t have any faith in their ratings, but apparently other people still do. Why? I have no idea.) They’ll just have to pay a higher rate of interest than they otherwise would have. And the government could always lean on Citibank to make the loan….
As far as GM and Chrysler–do you really think that they’re going to be the ‘hotness’? We’ll be lucky if GM even survives. Chrysler’s bound to collapse at some point. And Ford should be able to pick up some of that market share.
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July 10th, 2009 at 2:02 pm
Ok, I don’t get this opportunit very often, but I have to quote Lutz circa his 2001 hire:
“My bag of tricks–knowing what cars to do–is an ability only applicable to the car business,” he (Lutz) says.
“I have talked to Rick a number of times about how to fix the problems,” says Lutz.
http://www.businessweek.com/magazine/content/01_33/b3745056.htm
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July 10th, 2009 at 2:20 pm
Still a bunch of crooks…
Report: AIG asks gov’t to approve bonus payments
http://www.google.com/hostednews/ap/article/ALeqM5g4tUN7oGvfWYD1eN4daY7ZU01YCQD99BBHV80
How does one deserve a bonus when you lose billions? What idiots are running these banks?
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July 10th, 2009 at 2:26 pm
LauraM said:
“As far as GM and Chrysler–do you really think that they’re going to be the ‘hotness’? We’ll be lucky if GM even survives. Chrysler’s bound to collapse at some point. And Ford should be able to pick up some of that market share.”
———————–
Personally? No, not even a little bit.
Chrysler:
I think the gov’t had no interest in ‘GSBing’ Chrysler, they gave them a really hard set of benchmarks to hit (thinking they wouldn’t hit them, ie) UAW concessions, a ‘must-have’ merger, bondholder hit, etc). When Chrsler made it 90% of the way, the gov’t had to capitulate up for the last 10% and shove them through, knowing that GM could not possibly fair better if given the same demands.
That being said, the government, relatively speaking, has spend very little on Chrysler, just enough to keep them alive…and said ‘no more soup for you,’ we don’t know you after you come out of the GSB (although they ended up giving them a couple billion extra in the end). I figure Chrysler still ends up CH 7, and folds into Fiat/GM, maybe Ford…and whoever antes up and bids on the assets of value (looking at you Jeep). I can’t see Chrysler getting through 2010 without a lot more help, or a ton of luck
General Motors:
They continue to suck wind, post blasé numbers around the market norm. However, they have sooo much cash being infused in them (and still to come with the DoE loans) that we have the return of the classic ‘accountant dance’ of creativity and ‘one-time’ items like we have seen the last 5-6 years.
I think the government is reconciled to GM losing a ton of money, and have decided that now is the time to ‘fund the crap’ out of them, to get the issue away from them. It will take GM a long time to burn through 50-odd billion and another 10+ billion from the DoE.
I think worst case is GM is on the brink again in 30 months, by 2012. With reasonable management, and a evening out of the economic situation (not a recovery) they should be able to coast a good 5 years.
For irony purposes, GM running out of cash around the deadline they are to payback all the government loans seems appropriate.
One thing is for sure, the ‘cash’ will tell the story at GM…only we probably don’t get a real good feel for that until mid 2010. (After the infusion, DoE loans, and the IPO is 2 quarters in the rear view mirror and we have some data)
To me, the only reasonable shot GM has of profitability, and to be a ongoing concern/force to be reckoned with, is if the government folds all of Chrysler into GM, and forgives the debt owed to them in 2015 (and the UAW/VEBA does the same with any monies owed, and discontinues a lot of programs going forward). If your going to go…go big.
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July 10th, 2009 at 2:28 pm
Maybe I’m wrong–but from what I’ve heard, it takes four-five years to redo a product line-up. And people who are buying new cars tend to juge a company on their product line-up four years ago as much as their current line-up. (And, actually, GM’s still stuck with legacy of the cars they built in the late 70s.) Basically, car companies have momemtum, and GM’s was straight down before Lutz even arrived.
Turning around that momentum takes time. And it requires good marketing–which GM definitely lacks. That’s not Lutz’s fault. Although turning it around it seems to be his new job.
Besides, GM’s results in 2008 were definitely affected by the spike in gasoline prices. And the transformation of the North American auto market overnight. Everyone was caught off guard. Including Toyota.
And now they’re being affected by the bankruptcy proceedings as well as the overall contraction of the American market. The bankruptcy was, IMHO, basically inevitable due to the legacy costs. And the contraction of the American market–well that’s certainly not Lutz’s fault.
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July 10th, 2009 at 2:37 pm
There’s only one problem with that scenario–given the amount that GM plans to make, I doubt that there will be any floating around. The pre-orders will get all the allocation for at least the first year .
There will be the dealership models, but I don’t even want to think about the mark-ups on those.
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July 10th, 2009 at 2:52 pm
I don’t think they’re idiots. Amoral, devoid of a conscience, and completely blind to public opinion, yes. But idiots no. Getting those kinds of bonuses for driving the company into the ground, and the world economy for good measure, requires a special kind of talent.
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July 10th, 2009 at 3:08 pm
I do, that was possible the greatest dog and pony show todate. When they said they were going to ‘raise’ a additional 15 billion through savings and the sale of assets (like selling HUMMER a billion dollars, lol)
At that press release Wags also said:
“… GM is using assumptions of U.S. light vehicle industry volumes of 14.0 million units in 2008-2009 which are significantly below trend.”
“…continued elevated average oil price estimates ranging from $130 to $150 per barrel by 2009″
“GM is highly confident that the initiatives announced today, in conjunction with the current cash position and its $4-5 billion of committed U.S. credit lines, will provide the company with ample liquidity to meet its operational needs through 2009. ”
“Even under conservative planning scenarios, GM is well-positioned to withstand the U.S. market downturn and emerge a stronger company”
http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=828&docid=47123
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July 10th, 2009 at 3:09 pm
The dealers are going to be the ones auctioning off the cars. Not GM itself. According to the New York TImes, some of them are very enthusiastic about the idea. (Although I’m starting to doubt the New York Times fact checking sources.)
http://www.nytimes.com/2009/07/11/technology/internet/11ebay.html?hp
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July 10th, 2009 at 3:17 pm
The UAW veba debt was unsecured, so they shouldn’t gotten anything
__________________
In that case wouldn’t the taxpayers be on the hook for a big part of this coming from mandated retirement insurance and never to be repaid. Cutting a swap for equity deal prior to bankruptcy seems better from my wallets point of view.
You can do any deal you want prior to bankruptcy, but who is motivated or dumb enough to throw cash down that rat hole through a contested bankruptcy. If you have the leverage, cash and clout, people will hold to the deal instead of execution by law. It’s always preferable to have a viable plan and agreements than going into court for a fight, in my opinion, but again who would throw money down the risk of that rats hole to avoid following the course prescribed by law (No names but initals U.S.).
Consider the analogy of dying intestate. You would only have your possessions assigned by law because you don’t have a valid will or you have an ambiguous will, it’s not automatic that probate law will override your wishes, although probate law is in place if you don’t have a will or the resources aren’t in place to execute your requests, or your requests are ambiguous.
By extension if you enter bankruptcy court and the DIP financiers have virtually unlimited funds for your use, for better or worse you then have the unusual ability to craft a viable deal that more closely follows your own vision.
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July 10th, 2009 at 3:21 pm
lol….
P
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July 10th, 2009 at 3:27 pm
It also spawned a great GM-Volt thread, one of my favorites:
http://gm-volt.com/2008/07/15/gms-plan-to-raise-liquidity-by-15-billion-to-deal-with-slumping-economy-and-auto-sales/
=================
Some old quotes from that thread:
#55 Statik said:
July 15th, 2008 at 12:14 pm
Personal conjecture only, but I feel GM has backloaded everything to 2011-2013 and is consciously blowing all it’s cash now on future projects, money it would not have access to under bankruptcy protection. I feel the chances GM becomes insolvent, goes Chapter 11 and cease to exist are very slim, less than 15%.
Therefore under the scenario of Chaper 11, which would further restructure the company and reset debt…a ‘new’ GM should emerge. And not your father’s GM, smaller sure…but faster, leaner and more efficient.
As long as you don’t look at it from the aspect of GM’s debt holders, shareholders, employees or American/Canadian tax payers…thats a good thing.
—————
#8 Statik said:
July 15th, 2008 at 9:23 am
I fear for alot more than GM right now. I used to just concern myself with individual companies and their internals, but this could go far beyond that. We could have a totally market breakdown (ala 87) even this week.
Merrill and Citigroup on thursday…could be scary as heck. Couple that with the gov’t getting out in front talking about about using taxpayers money to shore up potential liquidity issues at Freddy and Fanny. On top of that the US dollar is getting its hat fed to itself again.
Perfectly healthy, solid companies, with coherent business plans could be destroyed in the wake of what is happening right now.
===================
/c’mon, thats a big helping of pwnsauce (no spelling error) right there
//hurts arm patting self on back…egotistical bastard
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July 10th, 2009 at 3:28 pm
Reducing debt by reducing the size of your company is no solution to anything
__________________
True, but haven’t they done both at the same time without incurring the usual write downs to a loss. And haven’t they reduced the size of the dealer bureaucracy, UAW concessions costs, UAW retirement and VEBA costs to GM, size of management, and flattened the management chain of command. Surely you must have seen something other than your statement above?
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July 10th, 2009 at 3:48 pm
The only really good thing about the new ‘burbs running about is that I feel a bit less guilty driving my old Discovery!
Yard work underway, the truck pulls the trailer…
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July 10th, 2009 at 3:48 pm
The thing you can attribute to Bob “pink tie” Lutz is a change in qualtiy and corporate attitude about making the best cars not just making cars.
The new lineup is getting better – I love some of their cars – Malibu and CTS in particular.
I can’t wait for my Black Volt – unfortunately it feels like I won’t have the opportunity for 3 years by the time they make enough and decide to sell in my area. I would also love to buy a voltec Equinox for the wife – and I don’t need 40 miles for this – but my personal prediction is that if GM was to build one today we could get 30 miles and by the time they have it ready for production the jumps in battery techonology – it will easily reach 40 miles.
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July 10th, 2009 at 3:48 pm
Lutz is very good at seeking out redundancy and bypassing it in the engineering and design segments of the industry, producing good cars that the market likes and accepts.
With up to 40,000 more white collar cuts due, I want a guy like Lutz to not only bypass the feather-bedders and useless nin-com-poops but to be enabled to do away with them,and several layers of hierarchies.
Having been given the charter, he is also empowered to wade through other satraps that have displayed abysmal abilities, like “marketing, advertising and communications”.
If I had my way they deserve not decimation, but elimination and starting allover from scratch. When have you last heard or seen a good marketing or advertising campaign from GM? Or good communications? Doing nothing would be better rthan what they produce.
I’m sure that half a dozen VPs were concerning themselves with green or blue for the GM logo. Anyone associated with it ought to be summarily dismissed as not worth a gnat’s eyelash of pay.
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July 10th, 2009 at 3:52 pm
Legacy does play a huge part, but it can be changed (Cadillac proved that I think). I don’t know if it takes 4-5 years to redo a lineup, but Lutz started in August of 2001, 8 years ago.
There are lots of other factors that go into a failure such as this for sure…but he has to share in a portion of it. For me, I don’t see any one individual that should take more heat than him…unless your going back to Roger Smith in the 80s, and how long can you kick at his corpse? lol
I would have much preferred a fresh start, but I also understand why that is difficult, what with the limited compensation/quasi-salary caps in place now. Still I think they could have filled his role (whatever that is now) without too much trouble.
Fritz on the other hand, nobody who ‘could’ step into the job of CEO would do it…especially at the prospect of any salary/compensation over $500,000 going to have to be approved by Ken Feinberg, the ‘pay czar,’ lol.
/I think we can agree, it is just a bad scene atm
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July 10th, 2009 at 4:00 pm
Hopefully, later packs will be forty friggin miles and not “28 1/2 miles unless you stay below 40 mph and keep the A/C turned off.”
(Assuming that this common accusation turns out to apply to Gen I after all, even though no Volt mules or IV’ers have ever been on the road outside of a GM facility [unless you count Lutz's quick jaunt to Congress in a Cruze mule]).
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July 10th, 2009 at 4:09 pm
But would Jeep actually help GM? Don’t they already have too many brands and too many nameplates? I would think they’re better off in the long run focusing on the brand names they’ve already got.
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July 10th, 2009 at 4:14 pm
Even if it is true (no source cited) that 30% are boycotting GM, it would mean nothing unless those 30% were actually current GM customers. More likely, they wouldn’t have bought GM products anyway.
My interest in GM has actually increased because of the improvements in quality and styling that I have seen in the last few years … and of course, the Volt.
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July 10th, 2009 at 4:17 pm
I believe the loans will be repaid when the do an IPO
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July 10th, 2009 at 4:19 pm
I agree with your final conclusion, but you are cherry picking you data a small bit. GM sales fell 28% from 2007 to 2008 amid a significant downturn… even Toyota sales fell 16% from 2007 to 2008 . More convincing to me… Between 2001 and 2007, each and every year GM sold less total Autos in the US, with an average of around minus 5 to 6% in “car”.
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July 10th, 2009 at 4:34 pm
Jack Welch, Bill Gates, Michael Dell, Steve Jobs, and Dick Branson would all fail miserably in the role of CEO of GM. Quite frankly running GM is much more difficult than running GE, Microsoft, Dell, Apple, etc. I don’t really know what Branson does. I think he runs Virgin Airlines, right? Anyway GM has many tough competitors around the world and many are subsidized by governments. GM has the awful UAW to deal with. Does Gates have a Union or unfunded pensions to deal with. How about the Department of Transportation? How about all the various state agencies as well as the lunatics out in California (CARB) who seem to be calling the shots in the auto industry. (Someone ought to break up that racket).The same with Apple and Dell. They really don’t build anything here in the USA. They have long since moved offshore. I not sure about GE except to say that they got out of high volume manufacturing a long time ago. They have an infinity of deals with the US government. If you took all their government contracts away, they would fold like a house of cards. Branson survives on celebrity culture kind of like Donald Trump. No this is an apples to oranges comparism. Running GM (or Ford or Chrysler) is MUCH more difficult than any of the before mentioned companies.
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July 10th, 2009 at 4:35 pm
Undoubtedly, she “needs” a huge vehicle to keep her kids safe (regardless of the danger she causes to others).
A gasoline tax would help to bring the externalized costs of wasteful vehicles back to their owners, instead of making society at large pay for the additional environmental, economic, national security, and medical costs.
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July 10th, 2009 at 4:46 pm
Static – defer 90 times out of 100 to your inside-the-industry knowledge, and in this case I have nothing to go on but “gut” – just have a sense GM is going to succeed. I do believe more prospective new vehicle buyers will give them a shot – and like what they see. So we’ll see – again, just a hunch…for whatever those are worth…
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July 10th, 2009 at 4:47 pm
Hey! Watch who you’re diss’n!
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July 10th, 2009 at 4:55 pm
I started to write something about person-miles-per-gallon and ton-miles-per-gallon, but that just kind-of clouded the point that I was trying to make.
I agree that a large vehicle (like the Tahoe) can be pretty green if the seats are kept full, or if you’re using it for jobs that can’t be done any other way. But most of the large SUVs that I see are carrying an office worker to the office. No kids or cargo in the back, no mud on the tires, no trailer. It’s clearly a job that could be done better by a small car.
So, given that most of the large SUVs that I see are used for jobs that are better performed by a small car, I do think that the Cruze should be considered “green” and the Tahoe Hybrid probably shouldn’t be. It’s much more of an apples-to-apples comparison that it appears, even though I wish it weren’t.
IMHO, using right tool for the right job (hybrid or not) is a much more useful step toward being green in real life, much more useful than slapping a hybrid drivetrain into some random chassis. Unfortunately, such common sense conflicts with just about everyone’s political dogma.
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July 10th, 2009 at 5:14 pm
Off topic———–I do think the Volt will sell relitivly well at the $40,000.00 [less the tax credit] Having said that I admit I am counting on many upper income people who are not on our list and in fact have never heard of gm-volt.com. One such group will be over the road sales reps who will like the up to 40 miles gas free. They will also want their customers to see that not only are they asking their customers to think green but that they already are. [ you know image ]
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July 10th, 2009 at 5:20 pm
The way it’s NOT ridiculous is that 99% of the time that truck is not going to be hauling 5 tons, but just it’s single driver, just like the small car is. Therefore, for all intents, the 40 mpg small car is, well, twice as green.
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July 10th, 2009 at 5:35 pm
One factor that I think gets overlooked: There really are a fair amount of U.S. carbuyers out there that aren’t happy with the bailouts, and aren’t happy with a government owned car company. Many of these who want to buy american are also ones who won’t buy GM while the government owns. If you poke around on the internet you can find polls that indicate this, but it’s not the kind of info that the MSM likes to put out.
Ford will benefit from this more than many realize. (imo)
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July 10th, 2009 at 5:36 pm
Wang Chuanfu of BYD would be my pick. The epicenter of the car world is shifting to SE Asia. But no way a visionary like him wants to take over an existing car company unless he can mold it the way he sees fit.
Elon Musk, then, now that Shaq has signed w/ Cleveland? Carlos Ghosn?
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July 10th, 2009 at 6:00 pm
Roger Smith. Thomas Murphy. Robert Stempel. John Smith. John Smale. And various other execs whose names I don’t know. Not to mention various reps at the UAW. (I’ll even throw some blame at Alfred Sloan and his immediate successor for good measure–he’s the one who set the tone with the UAW.)
But, yes, definitely. I agree. It’s a bad situation.
And I also agree with you that fresh leadership would be the best thing for GM. But I don’t know who. I don’t believe in change for change’s sake. If they’re going to go through an adjustment, they need someone good.
And good leaders are hard to find. And, I agree, no one who might be worth having would want to work for that kind of salary. Bill Ford would never gotten Mulally to leave Boeing for $500,000 a year! So, at this point, I’m just hoping for the best. I do think Lutz is good at what he does, but I also think he’d be better if he had someone working with him to choose among his various ideas. Who can OK the Malibu, and say no to the Solstice.
By the way, what do you think of asking Lee Iacocca to be on the board? I know he’s rather controversial round Chrysler these days, but he did turn the company around. Whether or not you think he should have gotten that bailout, it was still very impressive.
Or maybe Kirk Kerkorian? Wasn’t he was involved with the brief turnaround at Chrysler? And he knew enough to tell that Mulally was a good CEO. (Not that investing in Ford was a good move, but still…)
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July 10th, 2009 at 6:00 pm
“Fifty-one percent (51%) of all Americans say they are more likely to buy a car from Ford because it did not take bailout funding from the government. Twelve percent (12%) say they are less likely to do so, and 33% say the bailouts will have no impact on their car-buying decisions.”
http://www.rasmussenreports.com/public_content/business/auto_industry/may_2009/61_say_ford_more_likely_to_survive_than_gm_or_chrysler
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July 10th, 2009 at 6:15 pm
I like this quote from Fritz Henderson in this Business Week article:
Lutz, who had been acting as an adviser since April, planned to leave at the end of the year. But GM’s new board wanted him to stay, and the prospect of working on new models without the financial burden of years past reignited his interest. Says Lutz: “With all the burden that we have historically managed all gone, I don’t see how we can fail.”
GM has made cocky proclamations like that in the past, of course, only to go ahead and fail. But Henderson has something to say that is very un-GM. He says it’s time to forget about GM’s historic sales leadership and sheer mass. “It’s not about size,” he says. “It’s not about bigness. It’s about CREATING VALUE and DOING SOMETHING SPECIAL.”
Now that the playing field is even, he has a once-in-a-lifetime chance to prove GM can do that.”
http://www.businessweek.com/bwdaily/dnflash/content/jul2009/db20090710_603800_page_2.htm
Fritz is saying the right things. It’s the kind of things that people like Steve Jobs at Apple believe in. Look at the huge comeback that Apple has had in the last 10 years after they were in trouble in the 90s. Let’s hope that GM does the same thing … even bigger.
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July 10th, 2009 at 6:20 pm
Chrysler’s retirement plan was mostly funded. And most of the losses would have been born by the retirees under the age of 65, who right now are not going to have to take the losses they otherwise would have. The retirement insurance is limited for early retirees. And, not to sound heartless, but no one rescued the airline retirees during their bankruptcies. Or the retired steel workers.
That said, yes, it would have been more expensive to do things the legitimate way. But the US government isn’t supposed to use its clout to steal money from bondholders. If they think they can get more in an liquidation (and we’ll never know if they could have), then they had that right. And the US government used its power over the Tarp recipients and as the source of DIP funding to ram it’s plan through regardless.
It would have been one thing if the government had claimed the ownership of Chrysler, and the money. That would have had the added benefit of looking relatively legitimate since they would have been acting as the source of DIP funding–who generally gets priority.
But they didn’t. In fact, much of the way they did thing was to conceal the transfer of wealth from me, the taxpayer, to the UAW health plan. (The health plan is not insured by the government, by the way. If Chrysler liquidated, it would have been history.)
When I think of how many people don’t have any health insurance, and taxpayer money is being used for dental/eye/fertility insurance for the UAW retirees–yes, it bothers me.
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July 10th, 2009 at 6:39 pm
I love the fresh marketing talk (ebay. Note: is this a way to get around the ridiculously outdated sales channel restrictions, in that an auto manufacturer can’t own it’s distribution/dealers? IMO and almost everyone else’s on the planet, dealers suck–I’d rather buy direct and get direct pricing discount) but don’t at all like the also-ran target: “…and our cars and trucks will be among the best in the world.” AMONG?
Better not be the old GM–all sizzle and no steak (e.g., Saturn).
As far as the Volt goes–time will tell, but Voltec could be the product breakout that they need. Good to see GM w/ a sense of urgency, as time is of the essence with Voltec.
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July 10th, 2009 at 7:00 pm
I didn’t read down through all of the comments but haven’t seen one yet about the “selling on EBAY” part of the press release. This seems like something worth talking about.
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July 10th, 2009 at 7:05 pm
Pre-orders for Camaro went against the allocation to the particular dealer where the order was placed. The dealer’s allocation was not increased, however, as a result of the order. So if a customer ordered a Camaro from a dealer, the practical effect was to lock in the customer but not to give the customer any priority with GM, only with the dealer taking the order, and only that to the extent the dealer dealt honorably with those placing orders (rather than selling hot cars to someone else).
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July 10th, 2009 at 7:07 pm
No, there will not be a price decrease. The difference is that some of the money that might have gone to repay R&D will be used for something else, such as paying interest on govmnt loans.
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July 10th, 2009 at 7:15 pm
Just what I remembered, but even worse
One has to learn to listen to what they say but not rely on it.
IPO? Repay ???
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July 10th, 2009 at 7:20 pm
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Interesting….
It looks like Lyle’s new embed comment style has a limit of 10 layers. I was hopping to see this embed thread continue to layer into a one character comment box width.
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July 10th, 2009 at 7:22 pm
All these while collar cuts will really be hard on a lot of people and a lot of families. Undoubtedly, many of these jobs will be people who have been working hard under difficult circumstances. I feel for them.
As relates to the corporation, downsizing will be a good thing in the long term, but in the short term it will be a very confusing and expensive series of changes. How to get anything done will be very much unknown. No one will know what their job is, really, for the next year. Customer focused? Not yet.
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July 10th, 2009 at 7:26 pm
Nust agree with Statik – Lutz is a dinosaur that has trampled a lot of good stuff. Just because he favors Volt is no redeem.
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July 10th, 2009 at 7:50 pm
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Is the UAW able to force a Ford buyout by the Union/Government?
I’m thinking Ford’s future is somewhat dependent on if the UAW wishes to implement heir proven take-over strategy (that they implemented with GM) on Ford.
Keep in mind that the UAW now has (by having successfully taken over ownership of GM in partnership with the Government) a proven srategy of how to take over ownership of a large unionized private sector company.
Is it the UAW’s call if Ford ends up following GM into pre-packaged CH11?
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July 10th, 2009 at 8:05 pm
Statik,
What is your opinion of CDAVIS’s below question of:
“Is it the UAW’s call if Ford ends up following GM into pre-packaged CH11?”
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July 10th, 2009 at 8:07 pm
I’m really glad to see Bob Lutz staying on. He has the kind of toughness and charisma that it takes to move forward with GM.
It’s good to see all the positive support for Bob and “a pox on the houses” of the lefties that always contribute negative thinking.
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July 10th, 2009 at 8:17 pm
When he says he wants to return value to the Stock holders, does he mean old stock holders will be offered new stock in exchange for old? Maybe 1 new for 10 old?
Lyle – You need to see the cover of the August 2009 “Car and Driver”.
And watch the video of the 2011 Dodge Circuit EV.
http://www.caranddriver.com//circuitev
NPNS!
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July 10th, 2009 at 8:18 pm
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Mr. Lutz,
Welcome back.
Please consider replacing the BAS power train with a “Volt Basic” power train (the Chevy Volt power train but much lower capacity t-battery and sans plug-in).
Yes I know….it sounds like a loose screw idea…so I’ve been told…but please consider it.
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July 10th, 2009 at 8:20 pm
If Voltec Vehicles were available for auction, I seriously doubt I would be able to get one for the first 5 years.
I think only the very wealthy would be able to get them.
Those here that find it interesting for a Volt auction might find that they are immediately priced out as I believe that I would be.
I think that it ought not to be a broad experiment, but a very limited one at first.
At least “first come first served” would have folks who want a Volt so much, camp out for one just like they did for an IPOD or what ever.
No, I think an auction would be a really depressing thing as the price is barely manageable for most of us in the first place.
As far as the sign up list, If you look at it, there is California first, Texas second, and, lots of people out of the country listed there too.
I think that half of the people on the list will not be in a position to get the first model year for some reason.
But, what I would really like to see is a “last minute productivity surprise” in that there would actually be a higher production number of Voltec Vehicles.
Yes?
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July 10th, 2009 at 8:39 pm
Bob Lutz for communication ! Thats “total crock of sh*t”
He should be as far away from press and products as possible.
BTW, didn’t Lutz want a full EV like the Tesla – others suggested the EREV idea … ?
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July 10th, 2009 at 9:02 pm
But they didn’t. In fact, much of the way they did thing was to conceal the transfer of wealth from me, the taxpayer, to the UAW health plan. (The health plan is not insured by the government, by the way. If Chrysler liquidated, it would have been history.)
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A big chunk that “transfer of wealth” is due back in the treasury coffers in 2015.
Also, I kind of like the idea of families getting health insurance. It’s not that I’m totally altruistic but, the costs of added pain and illness are generally transferred to the taxpayers as insurer of last and catastrophic resort, and adequate health insurance for more Americans means these costs won’t be borne by my son’s generation.
Check the wisdom of Warren Buffet for the misconception of a liquidations proceeds. To get rid of car company’s assets in a market that has ( as guestimated) over 65% more than required capacity, will require the sellers to pay movers to dump the excess capital goods. See Cerberus’ sale proceeds for an example.
Once someone goes all in with $33 billion they have a fairly solid claim of ownership stakes.
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July 10th, 2009 at 9:07 pm
How ’bout a pox for the negative thinkers period, right, left or mid
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July 10th, 2009 at 9:09 pm
That would be a nice surprise!
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July 10th, 2009 at 9:12 pm
Getting those kinds of bonuses for driving the company into the ground, and the world economy for good measure, requires a special kind of talent.
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Well said!!!
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July 10th, 2009 at 9:14 pm
Depends on how the tax is spent. Many would say inevitably wastefully.
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July 10th, 2009 at 9:19 pm
Pat, pat. Those two are from me and I’ll ignore the fact that you’re cherry picking from a few thousand responses!
Gotta’ admit great call for 7/2008
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July 10th, 2009 at 9:55 pm
Lutz gets spot on CNN:
http://www.cnn.com/video/#/video/bestoftv/2009/07/10/ldt.tucker.lutz.back.cnn
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July 10th, 2009 at 10:23 pm
I don’t have a problem with the government providing health insurance. I actually favor single payer health care. However, if the government is going to provide health insurance, they should do so for all Americans. Not just UAW workers. I don’t like the idea of a special entitled class that didn’t even work for the government getting special benefits.
Second of all, there’s health insurance and then there’s health insurance. Preventative health care is one thing. I don’t think that single payer health care should include things like lasik surgery, and viagra. Or even dental insurance or hearings aids. I also believe that anyone who earns a middle class salary (and the UAW workers definitely qualify) should have to pay a small co-pay. They have none.
Third of all, you’re right that the liquidation value may have been lower than what the secured bondholders got. But we don’t know that. And we never will. And the way the government went about it (giving something to the UAW, while the bondholders didn’t get par.) looks very much like subverting the bankruptcy code. So, even if it was a direct transfer of wealth, that’s not what it looks like. And, IMHO, appearances matter.
Fourth, maybe it’s just me, but I’ve always believed that the government is supposed to act neutral. And not favor one class of people over another class. We are all equal before the law is, to me, the very basis of our democracy. That means when the government comes in, they’re supposed to treat the various parties according to the law.
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July 10th, 2009 at 10:36 pm
That’s true. But if every dealer has his allocation for the first year taken–it’s going to be difficult to find a dealer who has one for sale. And since there are fewer dealers now, that means the allocations will probably be more uniform.
The other thing is that many of the pre-orderers paid MSRP. People who waited and walked in paid an extra two-five thousand dollars. Since production is much more limited with the Volt, the mark-up could be even higher. It’s something to keep in mind.
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July 10th, 2009 at 10:53 pm
Not really. The point is to make gasoline more expensive so that people will use less of it. They could do this any number of ways. They could chose hybrids over SUVs. Use public transportation when available. Telecommute a few days a month if possible. Or plan trips to minimize gasoline usage. Etc.
Of course, it would be ideal if the government used the money for something useful. Like building high speed rail so that people could further reduce their gasoline usage. Or giving tax credits for solar energy. Or reducing the federal deficit. But even if Congress used the money to pay themselves bonuses, it would still serve its purpose.
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July 10th, 2009 at 11:01 pm
Vibe & G6 don’t have a Chevy counterpart either.
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July 10th, 2009 at 11:20 pm
The people who refuse to buy a “Government Motors” car because they want GM to fail are absolute fools. Follow the math, people… YOUR MONEY is invested in this company. If it fails, then YOUR MONEY goes down the toilet. Conversely, if it succeeds and can actually pay back some of the loans and make general contributions to the economy, then YOUR MONEY was not totally wasted. So remind me again… why is it smart capitalism to wish for GM’s demise?
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July 10th, 2009 at 11:56 pm
(Profitable is one thing, 50 billion in repayments in 5 years? Totally another story)
No problem…GM was lowest bidder to take over the operation of the US Dollar printing presses. However, it is only the $1 bill presses; so it will take a several months.
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July 11th, 2009 at 12:21 am
meta-comment on the + and – voting…
This has been introduced on other boards and it got very distracting because people wouldn’t be voting on whether the post was contributing to the discussion, only on whether they agreed with the post. So space-wasting comments like “Ditto!” and “Right on!” would get voted up, and well-thought out unpopular posts would get voted down.
So people would get distracted from the actual discussion and get into voting fights and long meta-discussions about the etiquette of voting.
So I notice a lot (maybe all) of the posts by Statik have a negative number. People, get a grip. I hate Statik as much as the next guy. He’s a jerk! He eats toast with jam on the wrong side! I get it. But he’s what I ‘ctrl-F’ to in any long discussion to get the “other side”.
But the reason I enjoy his input is he’s the counterpoint to Lyle’s optimism. And I enjoy reading opinions contrary to mine.
If everyone agreed with me, the world would be a boring place. (I’m sure boring = perfect and wonderful, but we’ll never know because all you fools won’t respect my authoritah!)
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July 11th, 2009 at 12:38 am
The G8 was a badge-engineered Holden Commodore.
But whatevs.
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July 11th, 2009 at 2:04 am
I certainly don’t argue the point. But we are talking about the government taking the money from individual taxpayers, pooling it in with trillions of dollars in other funds. Some of these funds support budgets which are entirely opaque. The same govt. you said took billions in taxes to wrongly put UAW members ahead of secured bondholders
When I commented on Dave G’s statement I’m not sure he had this in mind ——- “But even if Congress used the money to pay themselves bonuses, it would still serve its purpose.” For all I know the money could be given to various energy companies in the form of grants to be used for who knows what. The govt. still has a number of subsidies for oil and gas exploration on the books.
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July 11th, 2009 at 5:12 am
Low volume for the first year is definitely the way to go. They should crank up the volume the second year to meet demand (hopefully).
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July 11th, 2009 at 5:22 am
“…the speed of these bankruptcies had shocked expert bankruptcy attorneys..”
Probably more dismayed than shocked. Bankruptcies at this pace may cut the attorney’s fees an order of magnitude or more. This will have future ramifications, however. Business will try to take advantage of this pre-packaged bankruptcy model.
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July 11th, 2009 at 5:28 am
“Finally, the eBay partnership could be interesting. Very interesting. Hopefully GM will learn a lesson from the bankruptcy and will be bold rather than wimping out at the last minute and delivering a half baked compromise that makes neither its dealers nor its customers happy. Looking forward to more details on this one. Maybe we can get our Volts on eBay!”
I agree, this is the most interesting part of the press release. I also agree completely that they have to structure it so it can work for the customer or they should scrap the idea. At the end of the day, the customer has to feel they have gotten good value or they aren’t likely to come back regardless of what gimmicks NGMCO tries. No gimmicks, just value!
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July 11th, 2009 at 5:31 am
Absolutely for NAM, done!
No more fretting about which areas of NAM first. All over the world the first year with only 10K production is too costly, however (IMO).
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July 11th, 2009 at 6:16 am
Another thing about online auctions, is that you really don’t know who is buying your product.
Certainly, if you are buying an IPOD, it really does not matter.
But, think about this. The initial numbers of Voltec Vehicles could very easily be subject to what might be a “fraudulent buyer”, where, a competing interest against Voltec would bid to the point that as many as possible might be “taken off the market”, have the “bow tie” ripped off, a big red “X” slapped onto it instead, and then, all of them quietly crushed.
Yes it is a stretch, but, obsessive competitors have been known to
1. do everything possible to crush extremely advanced competition of all sorts,
2. make so much trouble for an extremely well advanced equipment maker, that that competition succeeds somehow to make that same advanced equipment become dysfunctional somehow, or greatly compromise the merchantability.
This can happen in an infinite number of ways with just a few underhanded methods.
Since there will be limited production in the first years, I ask Mr. Henderson to protect all our interests, both financial and environmental, by carefully structuring sales of Voltec in a way that protects the reputation of Voltec vehicles. This is imperative that an online auction not take place the first two or three years.
I’ve put down astro turf carpeting in my garage and have paneled it. (Not a great cost). When the garage door opens, it looks like a big interior room. (Although cluttered up somewhat at the moment). For me, the garage is very much a living space for me and a respectable place for my vehicle.
The initial two years for a new set of technologies are somewhat vulnerable to unfair critique. Having the best technologists out there properly using and observing new technologies is the best defense against unfair critique once the Voltec vehicles are deployed.
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July 11th, 2009 at 6:34 am
I agree with your beliefs expressed here 100% and most of their application. The one area I disagree is with the assessment that there was a favortism of one class of people over another. First, I wouldn’t characterize the UAW as a “class” of people. Second, the objective was to transform GM into a company that can compete in today’s world economy.
Getting the UAW costs in line and keeping the workforce motivated are means to this end. The fact is government was never nuetral in this matter. The motivation has been to save American automotive production and jobs. One could certainly argue that biases played in the decision making and that the wrong decisions were made, but one can also argue that the decisions were aligned with the motivation of reorganizing GM to be competitive. Yes, we will never know what would have happened if GM never went begging to Washington and if the subsequent government support never occured. I think we can be reasonably sure that C11, without government support would have drained most value from GM and there would have been little for the bondholders. Just think of GMs cash burn rate and the ability of a normal bankruptcy to progress. The only way for unsecured bondholders to have gotten much of anything was a direct trip to C7. That would have caused a national economic disaster(er) at the time (now too).
Shouldn’t we be saying that the bondholders may not end up with par? Or do you mean “par” as the value of all renumeration at the time NGMCO was formed. Remember, part of this whole process is that NGMCO was guaranteed huge financing at very favorable terms by the government. All owners of NGMCO are the beneficiary of this and it is part of the equation but not part of Par value due. Basically, IMO, the government supported this process completely outside of and far beyond “nornal” business lending. This was done to protect the economy, mitigate the loss of jobs, and preserve a manufacturing sector. How they chose or choose to act with the extra-ordinary support should be judged on the effectiveness towards these goals. I believe the court is still available for par value arguments and most assuredly will be used if this is the case, but does Par Value have a basis in equitability between UAW and the bondholders? Isn’t Par Value in this scenario, the stakeholders proportionate value of the company upon entering bankruptcy less the costs of the bankruptcy? This doesn’t include the value put in by the government during bankruptcy or after. The government could have put $100B in VEBA (bite my tongue) and the bondholders could still be getting Par.
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July 11th, 2009 at 6:57 am
I apologize. I started reading from the bottom up instead of top down, so I was assuming your last comment was referring to GM unsecured bondholders and not Chrysler’s secured ones. If they end up with $0.30 per dollar of actual value at the end of the day, that would be a travesty. If they were secured by manufacruring plants, then you are right, the government should have offered them to the bondholders instead. In the business climate in effect at the time, and still existing today, the plants only have land value unless the bondholders claim extends to equipment. Used manufacturing equipment value is greatly compromised as well, however.
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July 11th, 2009 at 7:09 am
Actually, I think limiting production to 10K the first year is the right thing to do. There will be a fair amount of refinements and improvements for the 2nd year. That is when GM should ramp up and is what they have been saying they will do. Even so, Gen2 and proliferation to other models is a more important goal. Quickly getting those to markets in significant quantities with low enough costs and high enough value to be profitable has to be the mid term focus.
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July 11th, 2009 at 8:19 am
Aren’t you the guy that said that it would ABSOLUTELY take forever for GM to come out of bankruptcy (or words to that effect)?
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July 11th, 2009 at 9:03 am
Well, they did get .30 on the dollar. Cash. (Give or take a penny or two, I don’t remember the exact amount.) And, to the best of my knowledge, they were secured by all of Chrysler’s assets. Plants. Land. Equipment. Logo. Dodge. Jeep. Etc.
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July 11th, 2009 at 9:12 am
With what I’m proposing, there may not be much tax money to spend.
If the government implements a floor tax of $65/barrel, and oil prices stay above $65/barrel, there would be no new taxes collected.
So why bother? Back in summer 2008, I proposed a floor tax of $65-$70/barrel, and most people responded that oil would never go that low, so why bother.
Meanwhile, people who want to invest in alternative energy are scared. They know gas prices under $2/gallon for a couple of years will kill their investment. If we want more investment in alternative energy, we need to give private investors some type of assurance that OPEC isn’t going to flood the market with cheap oil to kill off the competition.
As I understand it, oil prices around $65-$70/barrel is right around where alternatives start becoming competitive. If we can guarantee investors oil won’t fall below that point, private capitol investment will start pouring into alternative energy, and things will start happening MUCH faster.
So again, even if oil stays above $65/barrel and no taxes were ever collected, having a floor tax would give alternative energy a huge boost.
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July 11th, 2009 at 9:59 am
Lurtz said:
July 11th, 2009 at 12:21 am
meta-comment on the + and – voting…
This has been introduced on other boards and it got very distracting because people wouldn’t be voting on whether the post was contributing to the discussion, only on whether they agreed with the post. So space-wasting comments like “Ditto!” and “Right on!” would get voted up, and well-thought out unpopular posts would get voted down.
So people would get distracted from the actual discussion and get into voting fights and long meta-discussions about the etiquette of voting.
So I notice a lot (maybe all) of the posts by Statik have a negative number. People, get a grip. I hate Statik as much as the next guy. He’s a jerk! He eats toast with jam on the wrong side! I get it. But he’s what I ‘ctrl-F’ to in any long discussion to get the “other side”.
But the reason I enjoy his input is he’s the counterpoint to Lyle’s optimism. And I enjoy reading opinions contrary to mine.
If everyone agreed with me, the world would be a boring place. (I’m sure boring = perfect and wonderful, but we’ll never know because all you fools won’t respect my authoritah!)
======================
Thanks, Lurtz (I actually typed thanks, lutz…then i noticed my index finger burned off and I fixed the spelling)
I wouldn’t worry about the +/-, at least on my account. I expected to get a lot of ‘red ink,’ besides, red is a cool color. Besides that, the system can be (and is) worked around, so don’t put stock into it. For example, at one time in this thread, I was almost all green, then suddenly, all red. I have been +5, and ‘another’ anonymous poster deep in the hole…and 10 minutes later, reversed.
It is pretty easy to figure out who the ‘violaters’ are if you are really interested in that sort of thing. (Big green numbers on weird, off color posts, or when all the respondents are negative…)
I’m sure if it gets ‘too’ out of hand Lyle, or too big a distraction Lyle will rectify it at his discretion. As you say, if everyone agreed, it would be pretty boring.
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July 11th, 2009 at 8:09 pm
You never know, that is the beauty of this thing…and the forums. We all put in our 2p and make a conclusion.
Heck, if anyone one of us knew everything about anything, we probably wouldn’t be here…we’d be out on our 300 future futuristic yacht.
http://www.dubdaily.com/wp-content/uploads/2009/06/the-infinitas1.jpg
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July 11th, 2009 at 11:43 pm
Yep, we’re still here.
#6087 patiently waiting for my Volt.
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July 12th, 2009 at 1:14 am
Oh look. A Tesla hardtop with Dodge badge on it.
It’s even built on a Lotus body.
It’s still not practical as a primary vehicle.
*yawn*
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July 12th, 2009 at 1:24 am
Nah. A 2-mode hybrid would be far more efficient than what you’re describing. There’s a loss in efficiency switching from mechanical to electrical to mechanical again, which is negated mostly by the Volt’s ability to do highway speed in all-electric mode.
What you’re describing would be a low-range electric car, so the ICE would run almost constantly, like a BAS, or two-mode, or Synergy-drive vehicle.
Better to design an ultra-efficient two-mode setup– say a 1.8 liter HCCI driving a two-mode transmission with regenerative braking, ultra-capacitors, and thermoelectric generation off the exhaust.
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July 12th, 2009 at 6:02 am
I agree people will continue to look at GM vehicles and with all of this cash they have their shot. People will also start out buying enough GM vehicles (on a market percentage basis) for them to be successful. The questions are:
-Will GM make their vehicles well enough to retain those customers for their next purchase?
-Will the make the buying experience as good or better than the competition?
-Will they be able to sell their cars for prices that includes reasonable profits and value relative to the current competition and future competition that will be coming online all over the world?
-Will they be able to become innovative enough to catch up or move ahead of their competition, especially with the impending electrification of the Automobile?
-Will they be able to stamp out enough of the wasteful organizational beuracracy that has developed over 100 years of operations?
Time will certainly tell, but GM has certainly been provided enough opportunity to succeed. Now they need to get down to the long hard work of making it happen.
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July 12th, 2009 at 6:14 am
They will have most of their jobs (>150k to ~60k) and revenue in the process. Their retirement and healthcare is now mostly back in their own hands and the company ownership that they “traded” for carries no fees. In a sense, the UAW certainly got a lot more than the unsecured bondholders in this whole process but the net net is that everybody lost.
Do you think the UAW would not trade their GM ownership stake back for the cash owed to VEBA, the 10s of thousands of jobs, the job banks and other perks?
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July 12th, 2009 at 6:17 am
Using the right tool for the right job is the buyer’s responsibility (and to some extent the government’s, IMO), not GM’s.
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July 12th, 2009 at 6:40 am
With the benefit of hindsight its amazing how POSITIVE you were, my friend!
Still commercial property mortgage resets coming up should be a bunch of fun!
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July 12th, 2009 at 7:07 am
My comment was inrended to mean $.3 of value of asset and not of face value of bond. As to actual value of assets, doesn’t the secured bonds’ trading price reflect that? From this article http://www.thebigmoney.com/blogs/shifting-gears/2009/06/08/15-minutes-indiana-chrysler-bondholder-fame
““As part of Chrysler’s restructuring plan, the automaker’s secured debtholders will receive $2 billion, or about 29 cents on the dollar, for their combined $6.9 billion in debt. The Indiana funds bought their $42.5 million in debt in July 2008 for 43 cents on the dollar.”
July was just at the beginning “Carpacolips” (trademark Statik).
Also, aren’t secured corporate bonds issued against and tied to specific assets? http://www.aitraining.com/secured.htm
If this is the case, you would have to value the particular asset in question for each bond. Getting back to my earlier comments, $.30 seems inline with the market at the time of bankruptcy. Sure you can argue that the large bondholders were strong armed via their current position with the government but one could just as well argue that the vast majority of bondholders agreed to and got Par. The situation as it played out indicates the bondholders played hardball until the end of negotiations and agreed to most they thought they could get, bankruptcy or otherwise. The dissenting bondholders could probably still sue for additional compensation if they can show the government strong armed the accepting bondholders. In time, this shouldn’t be hard to prove if it is true.
It makes more sense for the Indiana pensioners to sue their fund managers for buying Chysler bonds in July ‘08. That was beyond reckless for this type of retirement fund.
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July 13th, 2009 at 9:42 am
I wish the “New” GM luck. They will need it.
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July 13th, 2009 at 9:46 am
I thought the Cruze was delayed until 2011 or 2012. I am hopeful it does make it to the dealership in 2010. It will be a great addition to Chevrolet’s line-up.
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July 22nd, 2009 at 2:44 am
July 22nd, 2009 at 7:24 pm
gm was a waste of my money, i went through 3 gm cars and they all have failed me b4 the 100k miles mark, then i decided to go foreign and booyahh, it was awesome, but im glad they have came out of it and hope they stay in business for a real long time.
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August 1st, 2009 at 6:06 am
Great,
I’m a FORD fan, and I’m glad this american company is getting better, but in general american cars are getting back in business, I can’t wait to the day it is possible for european customers to buy the VOLT, i don’t hope it will be to expensive.
Sincerly, Karsten, Denmark
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September 6th, 2009 at 6:56 am
CARB betrayed our country by directing the zero emission vehicle program into the ground, namely by Alan Llyod. He pushed for Hydrogen when we should be focused on making EVs. Be sure to check out what the former CIA director says about this on the website included with my comment. Basically, we had the opportunity 6years ago to be a leader in progressive transportation, but gave it to the Japanese. Now, we need leadership that understands we can create a new auto market and that gives America true security.
I hope America will support GM in all facets in creating a successful EV. This should include forcing oil companies to releasing Ovionic battery patents they bought from GM; this battery allowed a car to go 150miles per/charge ten years ago instead of the 40miles per charge now slated for the GM volt. http://www.thelocal.se/discuss/index.php?showtopic=17638.
The American community is skeptical about GM.
In turn I hope GM will truly believe in the program and give people the option to buy a VOLT. Anyone that was involved in crushing the EV-1 should have their personal books looked at and either thrown out of the new GM ot take an oath to make the volt work.
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September 6th, 2009 at 6:57 am
CARB betrayed our country by directing the zero emission vehicle program into the ground, namely by Alan Llyod. He pushed for Hydrogen when we should be focused on making EVs. Be sure to check out what the former CIA director says about this on the website included with my comment. Basically, we had the opportunity six years ago to be a leader in progressive transportation, but gave it to the Japanese. Now, we need leadership that understands we can create a new auto market and that gives America true security.
I hope America will support GM in all facets in creating a successful EV. This should include forcing oil companies to releasing Ovionic battery patents they bought from GM; this battery allowed a car to go 150miles per/charge ten years ago instead of the 40miles per charge now slated for the GM volt. http://www.thelocal.se/discuss/index.php?showtopic=17638.
The American community is skeptical about GM.
In turn I hope GM will truly believe in the program and give people the option to buy a VOLT. Anyone that was involved in crushing the EV-1 should have their personal books looked at and either thrown out of the new GM ot take an oath to make the volt work.
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October 20th, 2009 at 12:08 pm
I second that Maren. I love the satchel bag pictured above. I just wish it was available in metallic.
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