GM going bankrupt???

[ZemoButts]

my friend keeps telling me that GM is going bankrupt, is it true???

[my porsche]

they have been losing huge amounts of money, but i doubt they are going bankrupt, they own sooo many companies and have sooo many cars, and they are everywehre

[Matra et Alpine]

they have been losing huge amounts of money, but i doubt they are going bankrupt, they own sooo many companies and have sooo many cars, and they are everywehre
So once was Burroughs and Sperry ( they come to my mind more than an American auto company does at the mo' )

:D

IF they don't maintain cash flow the banks will force their closure.
If they don't maintain profit the share holders will crucify them.
Neither of these are driven by how widespread they are :(

[lithuanianmafia]

but with the amount of money that these major auto companies possess, I'm sure it would take a long time of them to run out of money?

[Matra et Alpine]

but with the amount of money that these major auto companies possess, I'm sure it would take a long time of them to run out of money?
banks and shareholders never want to be stuck with a company when the money runs out.

At the point CONFIDENCE runs out is when they bale.

That could happen at almost anytime.
Look how quickly ENRON collapsed ( it did have other reasons accelerating the downfall tho' :) )

EDIT: Just checked their stock ratings. GM currently has over $280B ( yes two hundred and eighty BILLION dollars ) DEBT !!!! And $16B in cash. Net tangible assets are only $10B. SO they are up to their necks in debt :( ( I'm a cautious balance-sheet guy developed over the years working in HP !! )
Both Ford and GM have just been down-graded. THe US is losing $1B per quarter, so the cash coudl last them a long time. BUT that's not how it's looked at. The debt ratio is huge for a company that is in a fairly dormant market :(

[ScionDriver]

If GM colapsed it would be a huge blow to the economy and US job market. I think they would get incredible help from the government.

[sunk]

If GM colapsed it would be a huge blow to the economy and US job market. I think they would get incredible help from the government.
Yes GM will get govt. aid.
FIAT are also getting it.

[lithuanianmafia]

If GM colapsed it would be a huge blow to the economy and US job market. I think they would get incredible help from the government.
they would have to because GM is one of the major driving forces of the economy

[Rockefella]

American people will ALWAYS buy Chevrolet.

[Pando]

banks and shareholders never want to be stuck with a company when the money runs out.

At the point CONFIDENCE runs out is when they bale.

That could happen at almost anytime.
Look how quickly ENRON collapsed ( it did have other reasons accelerating the downfall tho' :) )

EDIT: Just checked their stock ratings. GM currently has over $280B ( yes two hundred and eighty BILLION dollars ) DEBT !!!! And $16B in cash. Net tangible assets are only $10B. SO they are up to their necks in debt :( ( I'm a cautious balance-sheet guy developed over the years working in HP !! )
Both Ford and GM have just been down-graded. THe US is losing $1B per quarter, so the cash coudl last them a long time. BUT that's not how it's looked at. The debt ratio is huge for a company that is in a fairly dormant market :(
Debt per se isn't bad, but that's just TOO MUCH! But we have to keep in mind that a lot of money is also owed to GM, but hardly enough to cover the debt into reasonable numbers. You're right that how big the company is doesn't affect it's downfall, when shareholders and banks lose hope, it's over. GM will probably not go "fight to the bitter end" so to say, when there's no way out owners will change.

they would have to because GM is one of the major driving forces of the economySo communistic measures are ok as long as it helps the US? ;) I'm not too sure if it's a good idea in the long run though, just because GM would fall doesn't mean chevy's etc would dissapear, neither the jobs in the long run. Government backing in this case is like trying to fill a broken bottle with water, no matter how much you pour into it it will still eventually go empty.

[henk4]

may be if they start bringing European GM products to the American markets, which are already geared to the current fuel prices (which will no doubt continue to rise) there is a chance that they may increase their cash flow. Of course given the employee rebate to all customers is surely leading downhill.

[lightweight]

A company as big as GM, even if it goes bankrupt, it will just change ownership and go on.

In any case, I don't think that your friend has any inside information. He just heard it from his friend who heard it from his.

Let's get serious, shall we?

[Matra et Alpine]

Let's get serious, shall we?
http://www.detnews.com/2005/insiders/0501/11/A01-56205.htm

it's been in the open for AGES !!

and looks like little has really improved

[R34GTR]

If it happens at all , it will take the MG-Rover path the company has so much potential it will never go bankrupt and they can always seperate certain loss-generating parts of the company from the profitable ones(Corvette is doing pretty good) and sell the the less profitable or make the profitable ones compensate the loss making ones

[Matra et Alpine]

If it happens at all , it will take the MG-Rover path the company has so much potential it will never go bankrupt and they can always seperate certain loss-generating parts of the company from the profitable ones(Corvette is doing pretty good) and sell the the less profitable or make the profitable ones compensate the loss making ones
for sure R34.

The first thing they would do would be to declare Chpater 11 and then be permitted to operate without some of the legal and financial constraints of a business responsible to it's creditors :( What comes up every time though is the theory that if ONE fo the big US auto makers files Chapter 11 then all the rest will to to make it a level playing field for them !!!

[ZemoButts]

how many car companies does GM own? i kno so far they own

Doge
Pontiac

[VtecMini]

how many car companies does GM own? i kno so far they own

Doge
Pontiac"Dodge" is chrysler. I know sweet FA about american cars, but even I know that.

Opel
Vauxhall
Holden
Chevrolet
Saab
Buick
Hummer

Some or all of:
Daewoo and Fiat (I think)

[henk4]

"Dodge" is chrysler. I know sweet FA about american cars, but even I know that.

Opel
Vauxhall
Holden
Chevrolet
Saab
Buick
Hummer

Some or all of:
Daewoo and Fiat (I think)

GMC, one of the mainstays of the truck sales in North America

[Esperante]

Cadillac, too.

[ZemoButts]

thats it?? i figured way more

[syko]

there are heaps as they seem so have been collecting car co's for years

those that haven't been said are
saturn
oldsmobile

and they have connections with
subaru
isuzu
suzuki

[adamfraser]

Some or all of:
Daewoo and Fiat (I think)

I seem to remember smeone posting an image (dont remember if it was on this forum or not) that had a spider diagram of the main manufacturers (fiat, GM, toyota etcetc) and it had all the companies and % that they owned. I will try and have a look for it.

All i know is that GM own Chevy, Pontiac,Buick, Caddilac,GMC, Oldsmobile, Saturn, Hummer, Saab, Holden, Vauxhall/opel and Sabb.

AF

[adamfraser]

General Motors We wrote Friday about the earning warning and future guidance of General Motors. In reflection over the weekend, this could very well be a much more significant event than first reported by the media. GM president in the 1950’s, Charles Wilson stated, “What’s good for General Motors is good for the country”, a famous saying that has stuck for almost half a century. At that time GM had over ½ the U.S. car market and was the world’s unquestionable industry leader. Today that share has shrunk to a meager 24% of the market and GM’s market leadership is fast falling to Japanese car market Toyota. GM has a market value of about $16 billion; however, it owes bondholders more than $115 billion. In the coming quarter GM is now forecasting an almost $1 billion dollar loss and has cut its guidance in for 2005 of profits of $4 to $5 per share to $1 to $2 per share, and those numbers are questionable. With supply far outstripping demand, auto manufacturers are literally giving cars away to move inventory. In almost any other case, GM’s situation would make it a candidate for bankruptcy, and that is now a distinct possibility. Paying out billions per year in pension costs and healthcare payments for employees is crippling more than the auto industry. However, a GM bankruptcy could have devastating long term effects on the stock markets and investor confidence. It used to be one could buy GM stock with impunity as a conservative and safe investment paying almost a guaranteed divided that rose regularly. Today, holders of GM stock have seen it lose 14% in one day’s trading last week and it is now at a 52 week low. With Standard and Poor’s revising its ratings on GM the possibility of GM bonds going to junk could be the push that puts the car company into Chapter 11; an event that would reverberate through the whole market.

Well, they are definitely going under. If they owe bondholders more than $115billion, they are pretty screwed.

AF

[Spastik_Roach]

Well first thing is to cut the pension bullshit, and fast. Thats a downright pain the GM Companies ass. And 2nd, maybe make some decent cars?

[henk4]

Well first thing is to cut the pension bullshit, and fast. Thats a downright pain the GM Companies ass. And 2nd, maybe make some decent cars?

Like promoting the Geo more :D

[SlickHolden]

GM will keep falling till they realise this, they own many car makers around the world that sell great cars. Time they used them better instead of draining them for there own home market;)

[ZemoButts]

i read in this bussiness magizine they were the most profitable company in the US, even more than microsoft

[Rockefella]

i read in this bussiness magizine they were the most profitable company in the US, even more than microsoft
Doubt it, GM prob. sold more than Microsoft, but it didn't result in higher profits. GM could have sold 1,500,000 cars in two months (made up figure), but that doesn't mean they're making money on every car.

[CSL]

Well, they are definitely going under. If they owe bondholders more than $115billion, they are pretty screwed.

AF
GM is worth 300 Billion, thats Billion with a B


every car company has bad periods but you dont see a thousand threads about them going bankrupt

[Cyco]

GM is worth 300 Billion, thats Billion with a B

Maybe you should read this excert from adamfraser's post
GM has a market value of about $16 billion

Market valuation is what the market (investors, share holders.....) consider the company to be worth. Where did you get a figure that is 18.75 times this?

[CSL]

Maybe you should read this excert from adamfraser's post

Market valuation is what the market (investors, share holders.....) consider the company to be worth. Where did you get a figure that is 18.75 times this?
http://money.cnn.com/news/companies/research/research.html?pg=fi&osymb=GM&sid=2160&report=2&period=quarter

[henk4]

http://money.cnn.com/news/companies/research/research.html?pg=fi&osymb=GM&sid=2160&report=2&period=quarter

that is the balance sheet, the real "value" of a company is indeed what investors are willing to pay. You can also roughly calculate the value by multiplying the number of shares times the current value at the stock exchange.

[Matra et Alpine]

that is the balance sheet, the real "value" of a company is indeed what investors are willing to pay. You can also roughly calculate the value by multiplying the number of shares times the current value at the stock exchange.
and in best tradition the long term debt has been missed off that BS.
It's over $100Bn and somebody decides not to enter it :)

Friend who was our companies CFO had a great story of an interview (may be urban myth ) . He went for an interview when newly qualified. Was given an extract from the company books and asked to produce a balance sheet and a profit and loss account. His first question was "what do you want, a profit or a loss?" . He got the job !!!!! Lesson ? Accountants legally assign monies to different parts of BS/P&L for their own purposes :) Was a lesson I used when deciding where to invest :D