I agree that GM is unlikely to go bankrupt. I think they have some $30e9 in cash on hand.
"$30e9 in cash on hand"
Is that more or less than $E83:B times $2.98? I am terrible at math.
p.s. It's getting late and I'm tired. Take no offense.
When bonds come due, they're not going to be paid out with free test drives.
They're junk status because the ability of GM to actually redeem the bonds is becoming less and less credible.
If GM wants, they can issue more bonds, but they'd be laughably subprime.
I guess what it boils down to is this: Bond rating houses are not going to call "junk" on GM unless there's a serious reason to believe they have take on sizable risk. The rating could improve, but if the crux of the issue is healthcare subsidies, they're in trouble, because as far as I can tell, they can't make those go away.
The auto industry took a calculated gamble by shifting their business models from making profits on cars to making profits on their financing divisions. Automakers are essentially loan offices that sell cars, not autosellers who give loans.