GM shares drops to below $10

[Homer_Bart]

After Merrill Lynch hinted bankruptcy concerns yesterday, and other Wall Street analysts spread additional gloom, shares of General Motors dropped $1.77 to close at $9.98 -- GM's lowest close in more than 50 years.

While GM stock on Tuesday showed a bit of promise on the news that sales only dropped 18.2 percent in June (yes, it was supposed to be worse), nothing could slow the fall on Wednesday. Unfortunately for GM, the light at the end of the tunnel seems a far way off. Sales are plummeting, and those vehicles that do leave the lot are padded with generous financing and rebate offers (experts quickly point out that incentive-laden sales gains are often followed by slowdowns). With eight brands, 13,000 franchises, and a falling market share, many have begun (or continued) to question GM's ability to survive without insolvency.

Yes it's 5th July News, but still worth a thread I guess...
Discuss

[Dins]

To be honest, the automotive industry is pretty fucked right now. Except for Porsche, those bastards.

[Spectre]

If the global economy goes down any more, Porsche is going to be in trouble - more so than others.

Porsche doesn't make any basic transport, only "luxury goods". First thing most people stop buying when times get really tough? Luxury goods.

That said, Toyota and Honda are laughing all the way to the bank on this one.

It becomes even more imperative that GM declare bankruptcy (US bankruptcy has two stages/types, one of which permits you to keep operating and reorganize), boot the unions and other deadweight (union idiocy adds $2500 to the cost of every single car they sell in America), and get moving again. There are an increasing number of analysts that say that GM will declare one or the other form of bankruptcy in the next 12 months. GM has (IIRC) about 18-24 months left of cash at their current rate of burn... then it's all over. Ford is about to enter similar straits - they only have 36 months of cash, at most, left. Neither company is having much success in getting loans, thanks to the credit crunch and the remaining bankers not being total idiots - so that's the upper limit of their time unless they get their heads out of their asses.

[Cold Fussion]

AMD have had no cash and only debt for nearly 2 years now and they haven't declared bankruptcy...

[Spectre]

Yes, but AMD has an assured line of income from the many multiyear contracts they have with various PC builders and component retailers. They can show future assured income. AMD has assets that, if liquidation became a necessity, would more than cover their outstanding debt of $5 billion. That means that banks will loan them money to keep going.

GM... doesn't. Nobody wants to buy their plants, even if they sold everything they couldn't cover all their debt, they have no assured income, they have no long term contracts with clients, and most importantly they do not appear to have a plan, at least not a coherent one (and no, the Volt is not a plan. It's a product.). Banks will not loan out money that they cannot recover from the "corpse" at this point in time - and that's exactly the problem with loaning money to GM. If GM defaults, any creditor is totally screwed.

That's not to say AMD isn't in trouble too, but they're nowhere near as deep as GM is - and GM is still digging.

[JCTK]

Originally Posted by Spectre

If the global economy goes down any more, Porsche is going to be in trouble - more so than others.

Porsche doesn't make any basic transport, only "luxury goods". First thing most people stop buying when times get really tough? Luxury goods.

That said, Toyota and Honda are laughing all the way to the bank on this one.

It becomes even more imperative that GM declare bankruptcy (US bankruptcy has two stages/types, one of which permits you to keep operating and reorganize), boot the unions and other deadweight (union idiocy adds $2500 to the cost of every single car they sell in America), and get moving again. There are an increasing number of analysts that say that GM will declare one or the other form of bankruptcy in the next 12 months. GM has (IIRC) about 18-24 months left of cash at their current rate of burn... then it's all over. Ford is about to enter similar straits - they only have 36 months of cash, at most, left. Neither company is having much success in getting loans, thanks to the credit crunch and the remaining bankers not being total idiots - so that's the upper limit of their time unless they get their heads out of their asses.

the other thing for Porsche is that those people who're still going to be extremely bloody rich during the down time won't usually consider Porsche either... well, perhaps some would, but since I'm not a cock I think most wouldn't~

[Spectre]

If past history is any example, those buying Porsches will move downmarket to more efficient vehicles, or go way upmarket anyway. Porsche's sitting in the middle and it's gonna get screwed.

[D-Fence]

I don't think people buying Porsches will stop doing so in the near future . Only MXM maybe...

[prizrak]

Man, those guys really need to get their act together.

[Dsemaj]

If GM and the other 1.8 continue this way, it seems like they're going to go the way of the BL monster. It'd be a shame though, because it finally seems like they're beginning to pull their heads out of their asses and finally make half-way decent products. That said, they still have some distance to go

[Spectre]

Originally Posted by D-Fence

I don't think people buying Porsches will stop doing so in the near future . Only MXM maybe...

They're already having sales problems with their cash cow, the Cayenne.

The Boxster and Cayman are likely to experience rapidly declining sales as well.

[Aiolos]

A note: Please forgive my ignorance in this post...

Originally Posted by Dins

To be honest, the automotive industry is pretty fucked right now. Except for Porsche, those bastards.

Why is Porsche doing ok and the others not?

Originally Posted by Dsemaj

If GM and the other 1.8 continue this way, it seems like they're going to go the way of the BL monster. It'd be a shame though, because it finally seems like they're beginning to pull their heads out of their asses and finally make half-way decent products. That said, they still have some distance to go

Who are the "other 1.8" and what's the "BL monster"?

[Spectre]

Well, they're not "The Big Three" any more, since the ranking is now:

1. GM
2. Toyota (likely to swap up again later this year)
3. Ford
4. Honda (likely to pass Ford later this year.)
5. Chrysler.

So, some people refer to the old Big Three as the "Big 1.8" or something like that. The BL monster is British Leyland, of course.

[vikiradTG2007]

Originally Posted by Aiolos

Why is Porsche doing ok and the others not?

They can afford to buy the majority stakes in the Volkswagen-Audi Group. And they're not far away from doing it...

And the VAG is in the top 10 of the biggest auto groups in the world. And a Porsche buyout would bring it back under the control of its founders' family.

[jetsetter]

Staying:
Chevrolet
Cadillac
Buick (selling quite well in China)
Pontiac (maybe)

Gone:
GMC
Saturn
Saab
Hummer

[BerserkerCatSplat]

Originally Posted by jetsetter

Staying:
Chevrolet
Cadillac
Buick (selling quite well in China)
Pontiac (maybe)

Gone:
GMC
Saturn
Saab
Hummer

A GM spokesperson confirmed today that HUMMER is the only brand that GM is considering selling or closing.

http://www.autoblog.com/2008/07/07/j...n-the-horizon/

[jetsetter]

That was a guess from me.

[otispunkmeyer]

Originally Posted by Spectre

If the global economy goes down any more, Porsche is going to be in trouble - more so than others.

Porsche doesn't make any basic transport, only "luxury goods". First thing most people stop buying when times get really tough? Luxury goods.

That said, Toyota and Honda are laughing all the way to the bank on this one.

It becomes even more imperative that GM declare bankruptcy (US bankruptcy has two stages/types, one of which permits you to keep operating and reorganize), boot the unions and other deadweight (union idiocy adds $2500 to the cost of every single car they sell in America), and get moving again. There are an increasing number of analysts that say that GM will declare one or the other form of bankruptcy in the next 12 months. GM has (IIRC) about 18-24 months left of cash at their current rate of burn... then it's all over. Ford is about to enter similar straits - they only have 36 months of cash, at most, left. Neither company is having much success in getting loans, thanks to the credit crunch and the remaining bankers not being total idiots - so that's the upper limit of their time unless they get their heads out of their asses.

yeah but have you seen how many rich fuckers there are out there that have so much money the economic slow down wont affect them too baddly. heck half of them are probably making money off of the economic slow down.

[thedguy]

Originally Posted by jetsetter

Staying:
Chevrolet
Cadillac
Buick (selling quite well in China)
Pontiac (maybe)

Gone:
GMC
Saturn
Saab
Hummer

Swap SAAB for Buick. It's useless. Or perhaps stop using the brand SAAB and throw Buick badges on them. Pontiac has hope being a performance division but GM came a bit late to that table.

[jetsetter]

Swap SAAB for Buick. It's useless. Or perhaps stop using the brand SAAB and throw Buick badges on them. Pontiac has hope being a performance division but GM came a bit late to that table.

As I said, Buick is doing quite well in China and it has a few new products coming up that look interesting.