• Jul 3rd 2008 at 7:02PM
  • 70

After Merrill Lynch hinted bankruptcy concerns yesterday, and other Wall Street analysts spread additional gloom, shares of General Motors dropped $1.77 to close at $9.98 -- GM's lowest close in more than 50 years. While GM stock on Tuesday showed a bit of promise on the news that sales only dropped 18.2 percent in June (yes, it was supposed to be worse), nothing could slow the fall on Wednesday. Unfortunately for GM, the light at the end of the tunnel seems a far way off. Sales are plummeting, and those vehicles that do leave the lot are padded with generous financing and rebate offers (experts quickly point out that incentive-laden sales gains are often followed by slowdowns). With eight brands, 13,000 franchises, and a falling market share, many have begun (or continued) to question GM's ability to survive without insolvency.

[Source: Detroit News]

I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.

    • 1 Second Ago
      • 7 Years Ago
      Don't worry too much about GM. They'll file Chapter 11, dissolve their B-P-G dealers, offload Buick, Pontiac, GMC, Hummer, and Saab, send the current union workforce packing, and re-emerge as a leaner, lower-volume niche player with a new set of employees.

      It's not going to be the end of the world.
      • 7 Years Ago
      Buy low, sell high. Gm does have some pretty good products. Downsize, yes. Out of business, no. If you want to pass blame point at your neighbor with the Tahoe and Silverado. Demand was the sole reason these companies focused so intensely on trucks and SUVs. I dont think a single company, or person, foresaw gas doubling in 5 months. A company like Toyota weathers the storm better just for the fact they are 8 times bigger than GM and Ford combined. If they were so much smarter they wouldnt be having supply problems with the Prius. I do believe gas prices will be coming back down. Every time they spike, people panic, declare they'll never go back down, then they do. Oil companies have a vested interest of making maximum profits on a limited supply. They have no interest in demand drying up before supply. At $4-5+/gal the US market for gas would nearly cease to exist in 20 years. A combination of buying habits and increased supply over the next 2 years will drive the price back down.
      • 7 Years Ago
      Who cares if the big three sink???

      I work for a BMW store... My clients are the people who own or run the supply companies that supply the big three.. They are hurting bad!!! Laying off people. Having to close down.. I have one client that is a regional rep for a tire company.. He heard Ford sales down and told me that is a lot of truck tires that won't be sold now.. I also happen to be in a town with two very well known hospitals. The doctors are losing patients. WHY?? Because the big three are getting rid of so many people.. So they are losing money.. I always laugh when the doctors whine about it.. They pull up in their 7 series and wonder why business is declining.. Dumb a@@ bought a car that doesn't even support the economy.. My wifes dad lost his job at an insurance company as an IT person... Has nothing to do with cars.. AAHHH but it does.. They said do to the big three losing so many people.. Those people are losing their health coverage... So they let him and several others go..

      So bash all you want... But don't for one minute think the big 3 are not that important to the economy.
      • 7 Years Ago
      GMs current problems are a result of two factors, which if left unchanged, will come back to bite them in a different way if they survive the current crisis"

      1. A managment team which is old school and bloated beyone all reason; the guys and gals in charge now are who, in large part, are responsible for a product line designed by finance guys, a belief that building only trucks and suvs was the way to success and an absolute refusal to even begin considering new ideas and strategic relationships; about the only success one could attribute to this team is their entry into China which seems to be working.

      2. Factories and work rules from the 50s, the 1950s not the 2050s Inflexible manufacturing and an inability to persuade the UAW that their competition is in Kyoto and not Dearborn, has saddled GM, and the other U. S. car companies with a manufacturing base which is non-competitive vs. the world.

      Are either of the above going to change if GM survives the current crisis? Don't think so; the management team (or what will be left of them after even more cut backs) will still be making future decisions. And the factories, after expensive retooling will still be capable of limited flexibility.

      So even if the VOLT (at 40gs a pop and unprofitable at that) works and even if the Chinese buy Buicks like there is not tomorrow, GM will still be pretty much the same company we see today. Not much to interest investors who pay for future perfomance on Wall Street.

      Sadly, about the only way out for GM is some form of merger or strategic alliance (s) with a company which can give them flexibility and low cost product from, yes, overseas. Someone like TATA or NISSAN. While a merger with Ford may not make sense, some form of deal with the aforementioned is inevitable.
      • 7 Years Ago
      I should just buy GM. You can buy it for like $6bil.
      • 7 Years Ago
      I smell another taxpayer bailout cough bearstearns.
      • 7 Years Ago
      I'm not sure how investing to revive a program that GM lost a Billion dollars on will help stock prices. It was said that "what is good for GM is good for America", the inverse is also true. We should all be troubled by the impact of GM's downturn.
        • 7 Years Ago
        "Too little, too late axiom. Most people never wanted plugin cars, and they still don't."

        Your comments are ridiculous and laughable. You're so out of touch your a parody of yourself.

        "Range=limit, that's all the majority of people see when reading the specs of a EV. The only time I even drive a car is to go more than 100 miles. What good would an EV1 do me? "

        Even more ridiculous than your first comment. I guess you read that the EV1 gets 90miles on a charge so you threw out the 100mile figure. According to ABCNEWS, the average commuter goes 16miles each way. That means unlike you, an EV1 would do the vast majority of Americans very good.

        If and when plugins are rolled out, it will also not be a drastic transition for businesses to add plug sockets by parking areas, as incentive for people to park their cars and shop at that location for a couple hours. Many businesses would probably also offer that for their workers. We're not talking opening hydrogen refueling stations here, we're talking accessible outdoor sockets for shoppers, customers, and employees. Most definitely not a huge transition. Now go troll somewhere else where people don't know any better.

        • 7 Years Ago
        First off GM had the EV1 hand-assembled -not mass produced - which exponentially drove up the cost. They they also only leased them out, so how could they expect anything but a loss after snatching them back and crushing them? The PR disaster of crushing them even after a rainy 28 day vigil from leasers was so bad it is still talked about today like it happened last week.

        Last I read GM expects an initial loss for the Volt too, should they scrap that? According to your logic Toyota should've shelved the Pruis, as that was also sold at lost... and look what its done. Imagine how much a PR boost a resurrected EV1 would be. Your logic is not up to par with these changing times.
        • 7 Years Ago
        Too little, too late axiom. Most people never wanted plugin cars, and they still don't. Range=limit, that's all the majority of people see when reading the specs of a EV. The only time I even drive a car is to go more than 100 miles. What good would an EV1 do me? People want gas cars they can afford to drive. Failing that, put something else in the tank, but if it takes all night to fill then forget it.
      • 7 Years Ago
      I hope GM doesn't fold. I hope they suddenly get really smart (or find really smart people to hire) and start building decent cars that aren't cracker boxes that will get 50-60-70+ mpg on gas, hydrogen, peanut butter, or whatever, I don't really care. The majoroity of the population doesn't really want to plug in their cars overnight so they can drive a measly x miles before a gas motor kicks in. Have they not done some kind of consumer study on this? I'm no engineer but they figured out how to split the atom back in the 1940's for crying out loud. They put a man on the moon in the 60s'.How hard can it be in 2008 to move a vehicle from point A 50 miles down the road to point B on a gallon of something? Geez are there ANY smart people left?
      • 7 Years Ago
      I thought they were doing well outside the States? If that's the case, why don't they just sell off their American division to a car company that can manage better and/or focus on being a distributor for foreign cars in America instead of an American car mfg?

      • 7 Years Ago
      I reckon that in North America GM should consist of Caddy, Pontiac, and Chevy. All trucks should come from Chevy + t/corvette, car production should go to Pontiac and they can continue importing our cars form Australia, and Caddy should remain the luxury mark.

      Saab is one of the most un-innovative and un-interesting car companies around so cut them loose, Saturn's are nothing more than re-badged Opel's, why keep it around, though the same could be said for Pontiac, but at least Holdens are more interesting, and Buick & Hummer, seriously... wtf mate.... at least you can continue to manufacture Hummer vehicles for the military.
      • 7 Years Ago
      This is bad for every one of us in North America. If GM goes Bk, you can expect an national unemployment of 25%.
      It is amazing how many direct jobs and indirect jobs rely on the "Mark of Excellence".
        • 7 Years Ago
        ^You're delusional. Do you have any idea how much material goes into the average car? How many raw materials like steel are forged, stamped, and otherwise made into other things?

        Think of how many people are involved in the production of those products alone. Think of how many people are involved in the transportation, maintenance, engineering, supply of those products.

        That's a whole mess of people who suddenly can't pay the bills, much less buy things from our "service sector" economy.
        • 7 Years Ago
        You are delusional. GM, and the other domestics, are no longer of great importance to the US economy. The auto industry is huge, but US based union manufacturing is no longer significant to the US economy as a whole. Big, yes, huge, no.
        • 7 Years Ago
        If it goes BK, it doesn't mean it will suddenly disappear. Don't get confused.

        Not that I think it would be a good thing, but there are many, many companies around which have gone BK and are still around. BK is just a way for a company to restructure their debt or even forgive some of it and allow them to get back on their feet.

        Might also make for a good time for them to dump a large majority of the Union jobs remaining and become competitive with the imports again. Woud at least give them a more even-footing, rather than working uphill.
        • 7 Years Ago
        Read additionally here, http://en.wikipedia.org/wiki/Bankruptcy#In_the_United_States

        Also, some well-known, national companies which have seeked Bankruptcy protection in the past(or currently) include Worldcom(MCI), Polaroid, US Airways, Delta Airlines, UAL(parent company of United Air Lines), Owens-Corning, Circuit City, Bed, Bath, and Beyond etc. The majority of those are still around though some may end up being bought out. Very few just dissolve completely though.
      • 7 Years Ago
      The deeper reason behind the falling of the GM is that the company is run by a bunch finance people, who don't know much cars and worse yet have no interest and passion for cars. They don't care and don't know the quality of their products. In their eyes, all the cars, trucks, GM made, Toyota made German made, are the same, they can never tell the differences.They always believe they make the best cars, trucks, even though they are far behind in quality, innovations, styles.
    • Load More Comments
    Share This Photo X