Holden could be sold as GM goes into 'death spiral'

[thatdbeme]

http://www.theaustralian.news.com.au...592808,00.html

HOLDEN could be sold off if a desperate General Motors continues to fall into a financial death spiral, a global automotive expert says.

The principal of international automotive strategic consultants Autopolis, Graeme Maxton, said GM was already taking desperate measures to avert the greatest crisis in its 98-year history and sell-offs of its better performing divisions couldn't be ruled out.
"If you look at in terms of pure economics, their investment in Australia must be under question," he said yesterday.

"GM is having to sell off the family silver and close down anything that is not economic to cut costs in order to survive for the next few years," he said.

The Detroit-based automotive giant had already begun disposing of its shareholdings in Japanese makers Isuzu, Subaru and Suzuki, despite these being strategically significant ventures, Mr Maxton said.

And GM yesterday announced it had sold its property financing arm, GMAC Commercial Holding, for $12.5 billion.

"All of these are desperate measures to stay alive. What GM is waiting for is when enough of its pensioners die off that it can re-fund itself and invest for growth again. But it's absolutely hidebound right now. It has so much debt and so many liabilities that it has to simply cut them loose," Mr Maxton said. "They can't do anything until their situation improves but they've got themselves into something of a death spiral because the more they have to cut, the more consumers stay away from their products, the more their market share goes down and the more their losses go up."

Mr Maxton acknowledged Holden was not in the same dire sales situation as GM's US brands whose combined market share fell to a historic low of 25 per cent last year. But he said that the more profitable Holden was, the more tempting it would be for GM to sell it off.

"The question for Holden is who would buy it. There are actually not many companies except maybe a Chinese maker who would buy it right now," he said.

GM's traditional global rival, Ford, was in just as much financial trouble, Mr Maxton said.

"Ford is in many ways in exactly the same situation. The big difference is that GM really does understand how serious its situation is," he said.

"Ford is still pretending it's not that serious but their market share has fallen even more than GM's. The company hasn't woken up to what it has to do."

The cycle of cutbacks and rationalisation that threatened Holden also applied to Ford Australia, Mr Maxton said.

"It's absolutely the same situation but it may take a bit longer because Ford headquarters is in denial," he said.

[ScionDriver]

Man the US automakers are in trouble. Things are really looking bleak at GM, if only they could figure something out to settle up with their pensioners and fix their heathcare costs.

[Revolution]

Wow. And everybody thought Mitsubishi was in strife a few years ago!

[d-quik]

Originally Posted by Revolution

Wow. And everybody thought Mitsubishi was in strife a few years ago!

whats so "Wow" about that...

[Fiorano]

i feel that GM and Ford need to rally behind their best images, GM-Corvette , Cadillac, their best trucks... what the hell does anyone care about Buick anymore- they killed oldsmobile. and GMC? it is a double copy of Chevy Trucks, kill one line up. trim where it is easy.
Ford needs the same.. the double up of 'brand engineered' garbage is just sickening. how many Fusion-esqu cars do we need? or do we need only the Mercury montego and kill the fusion? i don't see how supporting brands which have such weak market presence makes sense.
then the freakin Unions.
I have worked Union before and I have no real complaints, but man o man they have been the death of the companies. The same workers who want a paycheck so bad and equal treatment from companies have sign ed away the daeth of their goose by trying to get the golden eggs.
Toyota (who is the big dog now) has no unions...and they had a 10% increase in PROFITS in 2005. um what is going wrong...
Ford Rules (and their subsidiaries of course)

[fpv_gtho]

If this is the way GM sees their solution, we better start caving the tombstone right away.

Would a shopkeeper tell his best customers to piss off, and worry about those that owe him money? NO. So why is GM doing the same????

[pimento]

Originally Posted by fpv_gtho

If this is the way GM sees their solution, we better start caving the tombstone right away.

Would a shopkeeper tell his best customers to piss off, and worry about those that owe him money? NO. So why is GM doing the same????

GM needs instant money, and the best way to get money fast is to sell something that's worth a lot. There's no point selling Buick or whatever because no-one wants it, and they need fast cash more than a solid performer in a small market to coccoon them from the coming strife. On the flip side, there's probably not much point in just closing it if they can't sell it at all, so it's not all bad.

[sunk]

Why doesn't GM kill off Buick, Saturn and Pontiac? (It will be sad to never see the Firebird again) instead of Subaru and Suzuki?
Atleast it will save them.

Ford should also 'wake up'. It should either convert Lincoln into a rival for M-benz and Mercury for BMW or kill both of them. Remember Blackwood.....?

[fpv_gtho]

Originally Posted by pimento

GM needs instant money, and the best way to get money fast is to sell something that's worth a lot. There's no point selling Buick or whatever because no-one wants it, and they need fast cash more than a solid performer in a small market to coccoon them from the coming strife. On the flip side, there's probably not much point in just closing it if they can't sell it at all, so it's not all bad.

They need something to keep SOME profits coming in though. If they sell off everything thats worth anything so they can focus on brands that are underperforming, theyre left with a limited supply of money thats probably less than what the brands were worth thats gone if they blow it.

If they keep their core brands, which Holden is a part of, theyve got a constant stream of income they can depend on.

[Mr. Jinx]

This is written by a stupid seppo. Dont beleive him

[clutch-monkey]

"lets sell one of our few profitable arms! yay! because that leaves us with the useless crap noone wants to buy!"
"er..sir...what are we gonna sell then?"
"..."

[2ndclasscitizen]

Originally Posted by sunk

Why doesn't GM kill off Buick, Saturn and Pontiac? (It will be sad to never see the Firebird again) instead of Subaru and Suzuki?
Atleast it will save them.

GM never actually owned them, only had small shares in both, less than 10% in Suby IIRC. GM also has lost Isuzu, its under its own control now

[IBrake4Rainbows]

Scare Mongering by an 'expert analyst'.

Non Story.

GM might be bleeding, but it's definately NOT in a death spiral.

to try and envisage the future as this guy does is stupid; only time can tell the true story.

[SlickHolden]

You got 2 Thumbs and 8 fingers. 2 Thumbs are almost dead and 6 fingers have seen better days, 1 is not bad the other is fine. Which do you cut off??
Lets be GM and cut off the good one. Makes perfect sense. The rest die off and your left with NOTHING!

[Matra et Alpine]

... or ....
80% of what you own can get you 20% of the money you need to restructure to survive the future.
20% of what you own can get you 80% of the money you need to restructure to survive hte future.
So you try to sell the 80 or the 20 ??
Can you start restrucuring with only 20% of the funds needed or with 80% ?