GM Is Headed For Bankruptcy - Again

[howardroark]

Bailouts failed the first time around - will the Obama Administration repeat their failures?

President Obama is proud of his bailout of General Motors.  That’s good, because, if he wins a second term, he is probably going to have to bail GM out again.  The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company.  It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday.  This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share.  However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling.  It would be too embarrassing politically.  Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.

GM is unlikely to hit the wall before the election, but, given current trends, the company could easily do so again before the end of a second Obama term.

Read More: http://www.forbes.com/sites/louiswoodhill/2012/08/15/general-motors-is-headed-for-bankruptcy-again/

[Soul Crusher]

I would love for them to collapse and file Chapter 7 on November 3, 2012 to let it fester for 3 days. 

[dario73]

Didn't Obama save GM?

Billions of dollars of stim spent and it solved nothing.

There is a lesson there for you liberal retards.

[dario73]

[ Invalid YouTube link ]

[pro nitrousADRL]

Liberals dont learn lessons, they deny, then change the subject, and blame it on everyone else.

[Straw Man]

Romney said he would take a lot of the credit for the bailout of the auto industry

[JBGRAY]

  The bailout of GM was an absolute necessity.  Chrysler could have been allowed to go under, but a deal was forcefully brokered for Fiat to take majority ownership.  Had GM gone under, Ford would have closely followed suit.....Ford was not on solid ground, and it shares many of the same suppliers as GM.  Despite awful mismanagement and crushing union legacy costs, GM did have a top tier engineering team with dozens of patents.  Had they been allowed to go under, some Communist entity in China would have bought them out for literally pennies on the dollar, obtaining all the engineering talent and patents virtually for free.

 The American auto manufacturers DESPERATELY need to cut loose of all union types....immediately.   Pensions, healthcare costs, and job banks (yes, American workers were getting paid in excess of $50k per year watching TV) played absolute hell on finances.  US cities are experiencing this more and more.  Like one journalist stated, "With a Hyundai you get satellite radio...with GM, Ford, or Chrysler, you get social welfare."

[240 is Back]

Romney said he would take a lot of the credit for the bailout of the auto industry

Romney saved us there.   What was his article he penned, "Let Detroit Be Rescued"?

[Hugo Chavez]

"Somehow, Forbes contributor Louis Woodhill uses this fact as proof that GM is headed for bankruptcy again. His self-described “unconventional logic” escapes me (“uninformed” might be a better word). But the basis of his argument seems to be that he doesn’t like GM’s Chevrolet Malibu as much as the Volkswagen Passat."
http://www.forbes.com/sites/joannmuller/2012/08/16/leadership-not-another-bailout-will-fix-general-motors/

[Hugo Chavez]

http://finance.yahoo.com/q/bs?s=GM

[JBGRAY]

"Somehow, Forbes contributor Louis Woodhill uses this fact as proof that GM is headed for bankruptcy again. His self-described “unconventional logic” escapes me (“uninformed” might be a better word). But the basis of his argument seems to be that he doesn’t like GM’s Chevrolet Malibu as much as the Volkswagen Passat."
http://www.forbes.com/sites/joannmuller/2012/08/16/leadership-not-another-bailout-will-fix-general-motors/

  GM needs to further streamline its models, something Ford has had a lot of recent success in doing(which is how they avoided going bankrupt in the first place).  Rather than constantly introduce new models or have a bunch of different models on the same platform, they should work on the segments they have and go global with them....a Chevy Malibu in the US should be the same as a Chevy Malibu in Europe(country regulation requirements notwithstanding). 

 Yes, their vehicles are probably every bit as good as a similarly priced Toyota or European import, but perception trumps facts, and it takes YEARS to alter perceptions.  GM is still overly reliant on its big truck and SUV market at its moneymaker but has been making serious headway in the passenger car segment(Camaro and Malibu are bonafide winners).  However, a surge in gas prices can cripple GM, unless they get the 200k+ buyers for their Volt model, same as what the Toyota Prius sells at.

[howardroark]

  The bailout of GM was an absolute necessity.  Chrysler could have been allowed to go under, but a deal was forcefully brokered for Fiat to take majority ownership.  Had GM gone under, Ford would have closely followed suit.....Ford was not on solid ground, and it shares many of the same suppliers as GM.  Despite awful mismanagement and crushing union legacy costs, GM did have a top tier engineering team with dozens of patents.  Had they been allowed to go under, some Communist entity in China would have bought them out for literally pennies on the dollar, obtaining all the engineering talent and patents virtually for free.

 The American auto manufacturers DESPERATELY need to cut loose of all union types....immediately.   Pensions, healthcare costs, and job banks (yes, American workers were getting paid in excess of $50k per year watching TV) played absolute hell on finances.  US cities are experiencing this more and more.  Like one journalist stated, "With a Hyundai you get satellite radio...with GM, Ford, or Chrysler, you get social welfare."

News flash: Both GM and Chrysler ended up going bankrupt AFTER the bailout yet everything you said never transpired. The fact of the matter is that bankruptcy isn't a life-or-death situation in most cases; it's simply an opportunity for a company (or an individual) to restructure their debts and business operations in order to make them more sustainable.