GM Bankrupt Again (Saturbray)

www.brayincandy.com ^ | 8/18/12 | bray

[joelt]

I’ll wager Hyundai could make a pretty good pick-up truck.

[FredZarguna]

This article is ridiculous. GM still has serious problems, and their European Division is an albatross, but they aren't going to go belly up anytime soon. In a decade their US operations will be either vestigial or nonexistent. But bankruptcy within months? No.

I would take issue with the claim that this is an issuer friendly environment. Comparatively, I can't agree with that assessment.

[FredZarguna]

I think you are overlooking the fact that GMAC received a LOT of TARP money; GMAC went to that well at least three times that we're aware of. We will never actually know how much GMAC received -- it is a very cleverly hidden part of GM's bailout. We do know that their terms were more favorable than just about anybody else's. So I doubt they have short term debt they can't cover; although they might, if they've been hiding the extent of their exposure, which, clearly through the end of 2009 is exactly what they were doing.

Even so, I think this is baloney.

[think4yrsf]

Did a quick Google search and found this recent article in Forbes:

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

[Attention Surplus Disorder]

I read that article. (from your link)

That article makes a subjective opinion about the market penetration and market dominance (or lack thereof) of GM, which we all at some level think of as a powerhouse brand name. I believe the article is fairly well argued; but I also think it is important to distinguish between “bankrupt” as a subjective writer might term a “sales downturn resulting from poor engineering or styling choices” versus “bankrupt” as an accounting/legal status.

I don’t really know the answer here, I am just pointing out that my prior posts on this thread related to the accounting/legal meaning of BK. I’m not sure GM could even go BK (acctg/legal) at this point; the government would lose so much money bailing it out (again) that IMO the US Gov is absolutely committed, 0bama or not, to keeping the company going. It very well may be that the Govt loses less money keeping GM in biz, even if they operate at a massive loss, rather than paying unemployment for the workers (and the workers in support industries, eg; steel, plastics, rubber)

I really don’t know. Perhaps the whole thing is just waiting for the next genius to come along to figure out how they and their pals can strip a few more billions out of the carcass. Then we’ll be informed of the “new plan for GM”.

[Slyfox]

I don’t know anything about GM’s financial situation, but I do know that when the gov took over, they hired in new recruits at $15.00 an hour with no benefits.

[bert]

The only solution is to sell off foreign divisions and shut down the money devouring American operations.

The American divisions could be offered for sale piecemeal but if there are no buyers to assume the debt they must be shuttered.

[ROCKLOBSTER]

I get irritated when people use words like gummit or goobermint

I agree.

Everybody knows it's "gubmint".

[bray]

Thanks guys, glad you liked it. For those who are English majors, my condolences for being born w/o a sense of humor.

Pray for America

[nc28205]

>>> , I’d point out that “GM” also includes GMAC, their financing arm.

No, GMAC is separate from GM. It is now known as Ally Financial. GM has a captive finance arm known as GM Financial. In 2Q12, auto sales accounted for about 37B in sales and GM Financial was just 487MM. Even so, auto finance companies have been performing fairly well lately because used car values have been high, which limits loss severity even if the loan goes bad.