Posted on 06/26/2008 5:55:45 AM PDT by jalisco555
NEW YORK (CNNMoney.com) -- Why is General Motors still in the Dow?
GM (GM, Fortune 500) may still be the biggest of the Big Three. But it's getting more and more difficult to justify keeping GM in the Dow Jones Industrial Average, an exclusive list of what's supposed to be the 30 leaders in the U.S. markets and economy.
GM confirmed on Monday that it is looking into selling its Hummer brand of monstrously-sized vehicles. And in a major sign of desperation, it also announced that it would offer six-year, zero-percent loans for 2008 models until the end of June in an attempt to clear out inventory.
The stock traded close to a 33-year low on Monday, and the company now has a market value of about $7.5 billion, the lowest in the Dow. The next lowest is Alcoa...and it's still valued at $30.3 billion, more than four times as much.
Heck, even Ford has a bigger market value, at $11.9 billion.
(Excerpt) Read more at money.cnn.com ...
But that still sounds like as GM goes so goes the nation. Imagine if GM doubled its sales, profits and bought out Toyota how great that would be for the nation's economy. The slow death of what was once America's greatness does not augur well. The information/financial economy does not seem to be its equal.
FYI, Car & Driver magazine's Top Ten automobiles for 2008 contained 3 GM models: Chevrolet Corvette, Cadillac CTS and Chevrolet Malibu.
That's one more model than any other manufacturer in the world.
A “paucity” that other manufacturers would love to have.
They're looking for you over at propaganda room of the Communist News Network. LOL
you’re a little behind the times...
check out post #82
Wagoner is exultant that he and the UAW gruelingly managed last year to make a deal that, if blessed by a federal judge, will cut GM’s unfunded liability by around $15 billion and pare cash outlays as well. But that will still leave Wagoner facing a colossal competitive disadvantage. The cost is not his fault. Rather, it is a legacy dumped on him by CEOs of decades ago who gained a certain amount of wage restraint from the union—and labor peace for their own terms of office—by granting retiree health benefits that had neither large, immediate cash costs nor, under the accounting rules then applying, much effect on the bottom line. Today, with health-care costs exploding and the accounting rules stiffened, this mess has come home to roost. It is the problem, says Wagoner (almost certainly giving too little weight to his shortage of revenues), that more than anything else “affects the future viability of GM.”
http://money.cnn.com/magazines/fortune/fortune_archive/2006/02/20/8369111/index.htm
“union members were summarily shot?”
you’d be right at home in China...
FYI, genius, those “union members” you want shot are Americans! Maybe you should go over to the DU where you’d be right at home with the rest of the hate-America crowd!
Oh, and before I leave you to your ignorance, “brownsfan”, members of the “browns” are union members too...but then you didn’t think about that now did you!
gezzzzzzzzzzzzz..the IQ level ‘round here drops by the minute!
“gezzzzzzzzzzzzz..the IQ level ‘round here drops by the minute!”
Obviously. Some of the poster here have trouble with grammar, punctuation, and identifying sarcasm without a great big tag.
People who buy Lincolns have different priorities from those who buy the soulless offerings of Honda.
I’ll likely buy another Nissan, Ford, Isuzu, GM and/or Mazda or two. I’m not even averse to trying a TaTa. That said, I’ll BURN my money before I buy another POS from the “guaranteed personality-free” Honda corp.
They may be what you want. You can keep them.
Time will tell. I'll bet that the people who bought a couple of weeks ago after Barrons made the same point are regretting it now.
That's three out of what, 60, 70 models total? Nothing by Buick, Pontiac, Saturn, Hummer, GMC or Saab. Plus, two of the three are non-mainstream models. Nothing in the small car segment, which is red hot now.
I’m not so sure about that. When I lived in Shanghai, I learned from my college age friends that they look at Buicks the way American college age kids look at BMW’s. That’s why the label sells like hotcakes over there. (Especially as compared to the Chinese brands like Chery.) I’m not sure the American public is going to suddenly start snapping up Buick HRVs; Chevy Aveos, Sparks and Sails; and Wuling Newsunshines and 6360s because they have an exotic rich-man’s cachet. The cars are sound (although I wouldn’t want to trust my life to a Wuling “Loaf-car”) but there’s got to be some excitement in the car, too that just doesn’t come from a GM brand.
The amount of money GM wasted developing Saturn (cars for people who don't like cars) could have purchased Toyota outright.
GM dropped the ball, and it will have a bad effect on our economies.
That's a bit of a pity, because I kinda liked the Envoy I rented in January...
Likely not near as much as the "No illegals left behind" vehicle financing going on by both automakers and banks. Neither care if the illegals can pay back the loan as they pass the loss on to other borrowers. I'm talking about brand new high dollar pick ups and SUV's they somehow have managed to have bought.
Whats the old joke...
GM is an HMO that makes cars on the side. Death by unionization.
Anti-Americanism is alive and well in the pages of financial journalism.
Maybe they’ll rebound, and those who are employing the “dogs of the Dow” strategy might actually make some money this time around.
I actually did this for a while and made some money. IIRC, you had to exclude the lowest priced Dow stock since that was truly a dog. In my day it was Bethlehem Steel, now deceased. Today that might be GM.
GM's unfunded liabilities are nothing compared to state and local govt. pension obligations. But that's a thread for another day.
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