Will GM Survive?

GM came close to filing bankruptcy during the early 90s, but I think they are in worse shape now.  Their stock has collapsed in the last few days, their credit ratings have been lowered and now the "experts" are recommending a belated sell on the stock.  You need to go back to 1974 to see a stock price this low.
 
Once this downward momentum has started, it''s tough to stop, and could become self-fulfilling.  Do you think they have enough time to turn the corner? 
 
 I can''t imagine a GM collapse, they almost certainly would get bailed out by the feds.  There are automotive suppliers in nearly every state in the nation, the effect of a GM shutdown would be catastrophic.

Foreign trash, the route of all evils.
 
Please notice that I did not use the term jap crap.
 
They could always follow Ford (worst position of the big three today) and cancel or sell the Hummer line all together just after spending 74 million on the Batton Rouge LA plant to build the H3T?? 
 
Reign in the paranoia people, it is still gonna get worse before it gets better.  Here in MI we hit the bottom (no where but up now), some of you guys have not got there yet. 

Yep it''s bad, and going to get worst. Many RV plants have gone into bankruptcy, Mills of all kinds have closed, mom and pop stores, and the list goes on and on. The oil companies, gas refineries, and the toads of wall street pushing the price of oil higher and higher is going to do to America what terrorists have been trying to do for years.

I hope GM makes it, and you would think the Feds would step in to make sure they do. The trickle down would be one of the biggest down falls in American history.

Should mention the ignorance sweeping the nation where every thing getting under 35 mpg is the blame for a doomed planet isn''t helping. The companies with the money to do the research for alternative power are the oil companies. What makes sense about that is, when/if a alternative is found, we will be paying them STILL at what ever price they want.

The government with it''s mandatory E-10 in our gas was a joke, and doing more damage the good. NOT taxing the oil companies with their 40 billion dollar profit is another joke. (voted down in congress last month by 9 votes from the republicans). That made me sick to read.

Taxing the oil companies is the most ridiculous, ignorant thing the government could do. The oil companies make an 8% profit margin. For the risk they take that is amazingly thin. The only reason the profits seem so large is that the volume is huge. Look at the gross revenue. Only an economic imbecile would remove the wherewithal from the oil companies to develop more advanced recovery technology. The real problem is the restriction on supply. Recovering proven reserves in the most stable oil producing market in the world by the safest, cleanest oil industry in the world is the answer to bringing oil prices under control and supply more plentiful. Guess what...that is right here in the good old USA with American companies. The enviro-nuts and libs have put more oil off limits in this country than the Saudis have to produce. The Dems and Libs want to force everyone to live how they want us to and this is one of the ways they are going to do. Break the US and Americans by spending our money on foriegn produced oil in an artificially restricted market in the name of you guessed it "saving the planet". That is what makes me sick...and the gullible ignorance of a huge swath of the American public.

In the past few quarters GM has had between $28B and $32B (that B is for Billions) in cash and cash equivalents.  They lost about $3B during the 1st quarter of 2008.  Will it get worse?  Maybe?  But they really have a substantial ability to survive.
 
P.S. The H3T is being built in the H3 plant in Shreveport, LA.  The H4 or HX, whichever it will be called, is already designated for production in a Mexico plant.
 
I certainly agree with 3Hummers on the taxing of oil companies and his comments.  In fact maybe this high cost of oil will really save our country instead of the reverse.  Many companies are now moving production back to the U.S. because of the high cost of ocean transporting.  Battery companies, furniture companies that I am personaly aware of have added over 4,000 new jobs in the past quarter to move production back into the U.S.  Maybe all of the foreign cars that are sold in the U.S. but not manufactured here will go away.  That surely would not hurt GM, Ford or Chrysler.
 
The cost to transport a 40 foot cargo trailer from Southeast Asia markets has gone from $3,000 to $8,000.  Maybe it will go to $20,000 and then watch U.S. manufacturing jobs climb.

Shreveport....Red Stick, what''s the difference? 
 
I am not worried, just pointing out the investment has been made, they need to reap some returns, and be SMART about it, no noid!!

In 1989 Exon profit was 5 billion dollars. Last year it was 40 billion dollars. They are putting out less gas and making more money then ever. The 2 largest oil companies have been in front of congress 2 times already this year to explain their high profits, yet nothing is being done.

Already the States can not afford to keep up with our highways, and roads due to the high cost of not only oil, but fuel. So projects are being put off that need built and maintained. States get fed monies to help in some bridges, and highway projects. NOT taxing the oil companies at 40 billion dollars profit, is leaving one place only to get more money for our nations highways and roads. And that''s taxing gas at the pumps.

Yeah The General will be just fine their already on the road to recovery. Dont believe the neysayers about market share, that aint true, he** every other car I see in TX is full size GM truck or SUV.
 
Theirs two real problems thogh and thats all them liberal bugeaters buying little foreign cars and then the cost of gas. When the he** is the Goverment going to do something about it? Four bucks a gallon is rediculus, makes me wonder what kind a man we need running ther country next.

The 40 billion is after they have paid tens of billions in tax. The government doesn''t tax away everythin yopu make eitheror you wouldn''t work. take away the incentive for the oil companies and they won''t drill new fields, spend money on exploration, technology etc they will just pump oil from known fields until they are dry. Being in business is about being compensated for risk. I develop real estate and right now there aren''t many opportunities because the risk is so great. If I can''t get an acceptable return I don''t do deals, which puts hundreds and thousands of plumbers, electricinas, carpenters, etc out of work. No jobs, no money, houses foreclosed on cars gone to the repo man....Right now my volume is down because the risk is too great, capital too expensive and the margins too small. I don''t have a fraction of the risk the oil companies do and I wouldn''t touch a real estate development deal for an 8% return. There is nothing wrong with being a salaried employee who works for an honest living but you have to understand the entreprenurial side of the business equation. The side that creates all those jobs. Pass a windfall profits tax on the oil comapnies and see what happens to prices, available supply, etc. It has happened before with predictable results so lets do the same dumb thing again.
As far as who we need in the White House. We need somebody with balls. We need someone that will say I am going to do the right thing for America and Americans and I am going to steamroll whoever gets in my way. Obama is already proving to be a typical weazel politician. Not sure McCain is much better but at least he doesn''t want tax the country into oblivion.

aMEN to that. You think things are bad now wait til Barock HUSSEIN Obamma gets elected. hello eight dollar gas and more forine cars everywhere. No way HUSSIEN Obamma will put America first, hes already pledged alegience to the Muslim countries. Thats why no flag lapel pin. McCain is no W, but hes probably the best hope GM has.

I agree with 3hummers. They may make $40 billion, BUT, I would bet that 8% profit margin is lower now then it was 10 or 15 years ago. It may be easy to talk about earning in dollar amounts, but it''s not the dollar amount they make that matters, it''s the percentage and profit margin.

If you run your own company and make $1,000,000 in revenue, and you only see a 8% profit after operating expenses, that means of that $1,000,000 you made, you only get $80,000 in profits, out of a million bucks!

I''m sorry, but If that was my company, all it would take would be 1 lawsuit to take that $80,000 in profit and throw it out the window.

If the government taxed the oil companies, guess who would pay for it; WE would, plain and simple, and I doubt anybody could deny they would work that into the price of a gallon of gas.

Here in Chicago, if you live in Cook county, you are paying three taxes on gas; County, State and Federal. I would love to have a 4th one If I have to come to the city, I make certain I have a full tank before I leave my county. There''s no way I''m paying $4.50+ a gallon when I can go 2 miles away from my house and pay $4.15.

Would it be nice to get a piece of that $40 billion? Yup, sure would, because maybe that could go towards helping Vets or funding education bills, but in reality, the money would go to fund one thing; the war, and it would be an endless vicious cycle. More money to fight the war, more war, which drives up gas prices, which gets taxed higher, which makes even MORE money to fight the war, which drives up prices, etc.

That''s the way I see it.

You only have to take one year of political science to know that if this were a corporation, and not a country, it would have been shut down years ago. BUT moving on to the oil companies not paying ANY tax on a 40 billion dollar profit is not fair to Joe us. What would be the harm of  gas being HALF the price it is now with a 20 billion profit? They are getting away with it, so why not ride the cash cow until it''s back is broken.

We wont solve it here, but I do hope GM makes it. Maybe they need better management, they could certainly use better advertisements. The government played it''s part in helping them get to where they are, only seems right they help. As far as the flood of non American cars, President Jimmy Carter did his best to help put a stop to it, but that only lasted the 4 years he was in office. The witch hunt mentality on American made SUV''s and those that buy non American cars don''t see themselves as part of the problem. To easy to blame some one else for their ignorance.

There will be alot of people losing sleep over the next couple of weeks.  I left the industry and Michigan 9 years ago and changed careers when my job was moving to Mexico.  I really miss the midwest, and hope that the domestic industry regains its footing.  Most Americans don''t realize the importance of the auto industry, we can''t afford to lose this infrastructure.  It''s unfortunate we don''t see people outraged at foreign cars, they just hate American SUVs, I don''t get it.

quote:

ORIGINAL: ONALLFOURS

You only have to take one year of political science to know that if this were a corporation, and not a country, it would have been shut down years ago.

This I''d have to agree with you on. I don''t think anybody could argue that (but I''d like to hear it).

As far as I can tell, the primary reason why we have $4 gas is because we import 60% of our oil from the middle east, russia and other countries who may not have the USA''s best interests in mind. So who''s fault is that? I hear stories on the news about alternative energy sources. Like what? Solar powered cars? Hydrogen fuel cells? If it were possible, doable, economical, and there was a market, people would be building them right now. But who wants to ride to work at 5mph? Or forget to "plug in the car" at night and not be able to go into work?
 
So he we are in 2008, competing with India, China and the third world for oil from Saudia Arabia, the same country that created the 19 9/11 hijackers. When I think of things like this, I say we are so stupid as Americans we deserve everything we are getting.
But wait a second, there are alternaitve fuel sources that we know about right now, that will help us solver many of our energy problems (carbon footprint which I personally think is a lot of crap, greenhouse gases, and dependance on foreign fuel). What about nuclear power?
 
So in the end, we''re too scared to drill in the artic national wildlife refuge because it''s some kind of primordial anti-human zone. We can''t drill offshore for oil because everyone is scared to death of an oil spill, and we can''t have nuclear power because people have seen Chernobyl on the news and are afraid of it and there''s always the "not in my backyard" argument. There isn''t a politician that is "really" willing to face up to what needs to be done. We can eliminate our foreign need for oil with nuclear power plants that replace the oil burning plants all across the country.

The environmental movement in 2008 is no longer about the environment. It''s a pop-cult religion and "An Inconvenient Truth" is thier bible. I like the environment just as much as everyone else does. I enjoy tooling through the woods and finding a beautiful little place to have a picnic and then come home and savor my moment. I leave a place behind just as beautiful as what I found for the next person to enjoy. That''s my mantra. I want to leave a world better off for my daughter. But I refuse to accept science sans critical thought, meaning modern environmentalism.
 
I drive to work in the Northeast every day and people are still driving big SUV''s. I still see plenty of H3''s on the road. Where I live is on a very steep hill where the road is very windy (think Lombard Street in San Francisco). Most of the time in the winter, the plows won''t even plow the snow. Every single resident of my street, without exception, owns a foor wheel drive vehicle. I just can''t for the life of me picture thousands of Prius''s spinning off the road with just a few inches of snow. I recently saw one on a flat bed after an accident. I can still remember seeing with my own eyes how much body damage and corrosion took place from the batteries after an impact. I keep trying to do in my head the calculus of what is better? Acid from batteries leaking in our landfills or gasoline? There''s no right answer.
 
So GM makes the Chevy Volt, problem solved, they make billions, etc etc. But wait a sec, electric cars are pulled out of the closet every few years like the answer to all of our problems. No one ever buys them though. Why? Maybe because most places people want to go are far enough away (like our jobs for one) that we can''t justify cars that need recharging all the time. Do you think employers are going to give employees free electricity to juice up thier cars while they are at work without passing this cost on to thier customers?
 
And then there''s Hummer. I''m a Hummer owner, so I''m biased. But where was it written in stone that Hummer is supposed to be some mass market car with wide appeal for all??  Not many people can afford $70K cars unless its leased and gas is $1 a gallon forever. So some dimbulb who can barely afford to just make the lease payments in 2004 buys a new H2, probably living from paycheck to paycheck, and now reality has caught up with his checkbook and he''s screwed. That''s why I see so many H2''s on lots with discounts and low mileage. That''s how I bought mine. Bottom line, if you need to know how much an H2 costs to gas up of the mpg, then you probably can''t afford it, so move on and get the prius. It''s a special purpose vehicle in a niche market. If GM is either (a) too stupid to realize this or (b) can''t figure out how to make money on low production vehicles, well then maybe they are doomed or Hummer would be better off in other hands. How many years did Chevrolet keep building the Corvette from 1953 with a loss until it finally made money. So see GM already knows how to make tons of money on a car with low production quantities. Hummer needs someone with passion to run the operation, not just another MBA bonehead more worried about his own McMansion.
 
Now that was a rant!!!
 
Angela

Wow Angela, that was well put. (I will have to read it a few more times). I loved your wording "The environmental movement in 2008 is no longer about the environment. It''''s a pop-cult religion and "An Inconvenient Truth" is thier bible." 

To add one thing about some people not being able to afford a Hummer, and the gas it takes to drive one. It''s always been my feelings that''s another reason why they are hated so much. People will always knock what they can''t have. (for the most part).

Anyway, LOVED your post, it was a very good read. Thanks for posting.

Nice read

Great thread.

ORIGINAL: NEFirewood

As far as I can tell, the primary reason why we have $4 gas is because we import 60% of our oil from the middle east, russia and other countries who may not have the USA''''''''''''''''s best interests in mind. So who''''''''''''''''s fault is that? <snip>

First off, in the US we have been so spoiled with cheep oil that we are convinced that $4 is expensive.  When you adjust for inflation, we are just popping out of the dip we''''ve been in for the past 15 years.  Anybody that didn’t think that it would end some day deserves what they are getting.

Countries that are selling oil to the US and other countries don’t have there best interests in mind.  Many of them have fewer reserves than we do.  Do you think we’ll be dumb enough to sell oil to them when they run out?  Maybe, but they’ll be paying for it.  Is this the best for you and me today?  No, but our children will appreciate it.  Use oil from the rest of the world today, when it gets depleted or they figure out that they shouldn’t sell it, and then we’ll get it out of out back yard. 

So he we are in 2008, competing with India, China and the third world for oil from Saudia Arabia, the same country that created the 19 9/11 hijackers. <snip>

The men who hijacked the planes on September 11, 2001 were created by al-Qaeda. The only tie in to Saudi Arabia is that Osama bin Laden didn’t like the fact that US forces were there.  Why were US forces there?  They were asked to be there by the Saudi Arabian government and they were being financially supported by the Saudi Arabian government.  A mad man was responsible for what happened on that day not the government or citizens of Saudi Arabia.

So in the end, we''''''''''''''''re too scared to drill in the artic national wildlife refuge because it''''''''''''''''s some kind of primordial anti-human zone. We can''''''''''''''''t drill offshore for oil because everyone is scared to death of an oil spill, and we can''''''''''''''''t have nuclear power because people have seen Chernobyl on the news and are afraid of it and there''''''''''''''''s always the "not in my backyard" argument. There isn''''''''''''''''t a politician that is "really" willing to face up to what needs to be done.
 
Not yet... but that''''''''s ok.
 
We can eliminate our foreign need for oil with nuclear power plants that replace the oil burning plants all across the country.
 

Oil burning power plants?  That''''''''s a whopping 1.6 % electricity production. Nearly half the electricity produced in the US is from coal...... US coal.

<snip>

If GM is either (a) too stupid to realize this or (b) can''''''''''''''''t figure out how to make money on low production vehicles, well then maybe they are doomed or Hummer would be better off in other hands. How many years did Chevrolet keep building the Corvette from 1953 with a loss until it finally made money. So see GM already knows how to make tons of money on a car with low production quantities. Hummer needs someone with passion to run the operation, not just another MBA bonehead more worried about his own McMansion.


But HUMMER is an environmental black eye weather it is deserved or not.  For a company that''''''''s trying to up there "green" image, it''''''''s a good reason to dump a brad whose future market is questionable.  They get two birds with one stone.

Now that was a rant!!!

Angela 

Steve

You don''t think greed is playing a role in the price of gas right now? Or the fact we are bringing in oil and not using what''s under our soil? Or this whole "green" movement isn''t powered by the mighty dollar? (that''s where it started, but tree huggers took it to a new culture). If you took every Hummer off the face of the planet it wouldn''t make a 000000.1 % of a difference in our environment

GM is pulling a blanket over their heads and not doing what really should be done here. I doubt if the lack of sales is based on what people really think about the environment. it''s more like they want to get from point A to point B with the best MPG. The whole Witch hunt mentality towards Hummers and GM only proves the ignorance of people haven''t changed since we were living in caves.

Hummer will survive, but it may not be under GM''s Ownership. I do hope that it stays in American hands for ''brand credibility'' as well as UAW Workers.

As for this other discussion that has spawned, I don''t like to get political on automotive message boards but here goes! Drilling for Oil Domestically will take nearly a decade to produce any significant production level. Even at full production, with investment costs related to site drilling, we could only lower the price of oil by around ONE DOLLAR a barrel. This would not lead to ANY change at the pump and would lead to no more than 5% less dependance on foreign oil sources. The money that we would spend over the next decade to accomplish this could be invested in better ethanol sources similar to Brazil, who is nearly 100% energy independent. Why waste money, bring any harm to our nation''s natural beauty, and waste time putting off solving a problem that will come back to us in the future? We should stop worrying about gas prices and start worrying about our energy future! This government has been dragging the ball since Ronald Reagan was elected in the 1980''s. He may have been a great communicator but he was a do-nothing President and left us with more problems that we had before. You may not like the idea of ''taxes'' since most of us are well-off, but let''s get real! We''re in massive debt in this nation because a President decided to cut taxes during a war and unless you want to leave that debt to your children and grandchildren it''s time to face the music. Most of you will probably vote for John McCain because of predispositions, but take another look and you''ll see (even if you don''t want to see) that we can''t afford another President who cuts taxes on us (well-off Americans) and spends like the devil. The job of your government is not to create problems, it''s to help you solve them and protect your liberties. we must solve the infrastructure and energy problems of this country NOW or we''ll have a much greater problem at a later stage. I''m willing to pay my part because it''s the American thing to do, not the selfish thing to do, and I hope that everyone else starts acting like Americans again too.

P.S. don''t take any of this personal as we can all disagree and still get along, that''s what America is supposed to be about: Ideas!

I can''t figure out why my keyboard keeps putting " instead of a regular apostrophe (by the way).

The job of the government is not to solve our problems, it is to get out of our way. ( Federal government is for national defense, intersate commerce, etc not making sure I have health care or a retirement.) That is my personal responsibility. Not sure where you get your facts and figures on oil production, supply, benefit but your statistics are incorrect and the 10 year deal, well if Clinton had not put ANWR off limits 11 years ago ANWR oil would be available today. I agree that we should not waste time on working on alternative forms of energy but to break this country in the process is ridiculous. Its like killing the patient to cure the disease. Drill now, off shore and ANWR, use the shale oil resources, etc to bridge the gap until nuke plants, solar, wind, hydrogen, etc can all be developed and implemented. While people are losing their homes, cars, etc you don''''t want to try to cut their fuel costs?
As to taxes I disagree. I pay enough in taxes now. My company pays enough in taxes now. I am sick and tired of watching the government waste MY money. The more they tax the more people don''''t work for me, the less I invest in new projects because the risk/reward scenario gets bleaker, the more people don''''t work. Great economic scenario there.
Reagan ended the greatest threat this country has ever faced and you call him a do nothing President??? Steals any credibility from the rest of your argument to make a statement like that.
This country has had a massive debt for decades through Repub & Demo. administrations. The tax cuts spurred the huge economic boom that we have gone through and that probably enabled many of us to buy our Hummers. If you understand economic history, economics and cause and effect you understand the impact of tax decreases on the economy. If you don''''t, vote for Barack and he will take care of your discretionary income for you.
You say McCain will "spend like the devil" but apparently think Obama is going to pay for universal health care, SS for all, etc with what????? good wishes and platitudes? BO is going to sweet talk all of our problems away. Hey sounds like typical political BS. I don''''t agree with McCain on a number of issues but I disagree with BO on a whole lot more. Give Pelosi, Murtha, Schumer and Kennedy a lib in the White House and we are all screwed.

It doesn''t take a whole lot of political knowledge right now to figure out no matter what happens at the end of the elections... we are all screwed. It will take at least 4 years (Maybe even longer, if ever) to gain back what Americans have lots in the last year.

And from what I have read, refineries are no where near 100% production of gas. Last year it was stated that (one of them can''t recall but went something like) "We are making more profit producing less fuel then when making more".