Worst Case Scenario Avoided – General Motors
by Tom on July 10, 2009
in Market Musings
Well, they are out. In 40 days, GM went into and came back out of bankruptcy. Does that mean that there’s nothing to be concerned with in terms of GM? Nope. For instance:
- They still have to prove that they can build the cars that people want.
- They have a whopping debt to the US taxpayer that needs to be paid back.
- There are a lot of debts and obligations that got left behind that need to be sorted out, liquidated and cleaned up.
But, the worst case scenario, a liquidation of GM has been avoided. I think you can compare it to seeing a Category 5 hurricane heading to shore and then it turns and goes off to sea. A lot of rain, a lot of wind and a fair amount of damage, but not a direct hit.
So that’s kind of good news….
Tom Vanderwell
New GM Emerges in One of Worst Sales Slumps Ever – Automotive * US * News * Story – CNBC.com
The new General Motors arose on Friday as lawyers finished an all-night paperwork session transferring the bulk of the automaker’s assets to a company controlled by the U.S. government.
Auto Sales…..
by Tom on June 2, 2009
in Market Musings
Why would I post a video about auto sales on a housing and mortgage blog?
Very simply – the direction of the auto industry gives us a good view at what the overall economy is like and what the jobs market (at least auto related) is looking like…..
Check it out….
Tom
GM Auto Sales
by Tom on June 2, 2009
in Market Musings
GM May U.S. vehicle sales drop 29% – MarketWatch
General Motors Corp. on Tuesday reported a 29% drop in May U.S. light vehicle sales, outperforming even the rosiest of analyst targets a day after the automaker filed for bankruptcy. GM posted sales of 190,881 vehicles, down from 268,892 a year ago. Car sales fell 37.7% to 81,009 while light trucks slipped 20.8% to 109,872. GM affirmed its second-quarter production target of 390,000 vehicles, down about 53% from a year agoTom here – it would be interesting to know how the staffing levels at GM and their parts suppliers and dealerships match up to their production targets…….
Reactions to GM
by Tom on May 28, 2009
in Market Musings
This video played on my local TV station. It’s got both the current governor and the leading Republican candidate (and also a US Rep. from Michigan, on it.
Oh, and just for the record, I don’t agree with our governor most of the time, and I didn’t vote for her, but I think she’s right this time. It’s going to be a challenging time.
A sobering assessment of a challenging time…..
Tom Vanderwell
More on GM
by Tom on April 22, 2009
in Market Musings, Videos
Missing a $1 Billion payment – now that’s a serious delinquency!
by Tom on April 22, 2009
in Market Musings, banks
I think the stakes just got a little higher in the GM scenario. GM has a $1 Billion debt payment on June 1 and they are most likely not going to be able to make that payment.
The ripple effects of this aren’t going to be pretty…..
Tom
GM to miss $1 bln debt payment due June 1: report – MarketWatch
General Motors Corp., struggling to restructure itself amid increasing odds of a bankruptcy filing, said it plans to skip a $1 billion debt payment due June 1, according to a Wall Street Journal report on Wednesday.
Rather than……
by Tom on April 13, 2009
in Market Musings
Rather than “Houston we have a problem” this could be described as “Detroit, we have a problem.”
The fact that the Treasury is doing that says to me that they don’t have enough (or any) confidence that GM’s reorganization plans are going to be agreed on by everyone that needs to.
So it’s off to court and the only ones who win will be the lawyers?
Tom
Treasury Is Said to Warn G.M. of Bankruptcy Risk – NYTimes.com
The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline, despite G.M.’s public contention that it could still reorganize outside court, people with knowledge of the plans said during the weekend.
As GM goes, so goes the Nation?
by Tom on April 4, 2009
in Market Musings, Videos
That used to be the kind of power and performance that GM had and it’s impact on our economy. I hope they don’t have that kind of impact any more based on the direction they are heading…..
The Wall Street Journal has a good analysis of the press conference the new CEO of GM had on Tuesday. I’d say enjoy, but it’s not pretty.
GM CEO loses job at Obama’s request – true change or window dressing?
by Tom on March 30, 2009
in Market Musings
Apparently on Monday we’re going to find out more about the government’s plans for the auto industry, but the news got “leaked” today that one of the White House’ demands was the GM CEO Wagoner steps down as part of the plan.
That raises two questions in my head:
1. Is the government truly forcing substantive change when they are working out a way to help GM continue as a “going concern?”
or
2. Is the forcing out of the CEO at GM more window dressing that makes it appear like they are providing substantial change in the auto industry but in reality, is it just a way to make it look like they are changing things and make it easier to justify giving billions of the tax payers money to the auto industry?
Why does that question matter to the housing and banking industries? Because if they are “forcing” window dressing changes in the auto industry, they are probably doing the same thing in housing and banking. We need to actually fix the problems, not just put a bandaid on them….
What do you think?
GM chief Wagoner reportedly to resign at Obama’s request – MarketWatch
General Motors Corp. Chairman and Chief Executive Rick Wagoner is resigning from his leadership of the troubled automaker at the request of the Obama administration, reports said Sunday.
Wagoner’s departure is part of the restructuring agreement between GM and the U.S. government, which will clear the way for the company to receive further federal loans, the reports said, all of which cited an unnamed administration official.
47000 jobs – and a factor of 7
by Tom on February 17, 2009
in Market Musings
Ouch, this is not good. GM needs $16 Billion now, they are going to lay off 47,000 and it appears that there is typically a fall out of 7 more jobs for each one?
Calculated Risk: GM asks for $16.6 billion, to cut 47,000 Jobs
General Motors Corp. on Tuesday said it will need as much as $16.6 billion in additional aid from the U.S. government and could run out of money as soon as next month if it doesn’t receive at least some of that funding.[GM] … laid out a plan to close more factories, eliminate thousands of dealerships and slash 47,000 jobs this year around the world.
GM, however, said it failed to strike critical deals with the United Auto Workers union and bondholders to reduce labor costs and shrink its $47 billion debt load. Negotiations with both parties are expected to continue.
