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]
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Reader Comments (Page 1 of 5)
rouse42 @ Jul 3rd 2008 7:06PM
how long can they last?
will they be forced to BK before the Volt?
axiom @ Jul 3rd 2008 7:39PM
They can announce a crash-course, YESTERDAY, to restart the EV1 and have it out in 18months. If by some miracle they can do it in 12, then fine. That will give them positive news, hold a major sell-off, and if they come through, maybe position to be the #1 auto seller of the next decade. How does that sound?
Aprime @ Jul 3rd 2008 7:50PM
lol, another dellusional greenie thinking there's a magic solution for every problem in the world.
axiom @ Jul 3rd 2008 8:21PM
Hey "aprime". Stop thinking like a dumb-blond and look out the window. It was logic like yours thats got GM stock to $10 a share, staring down bankruptcy.
If GM still has any cavemen like this in their boardrooms I suggest they give them the door and a severance package, QUICK. Otherwise expect shareholders demanding criminal probes when the sh!t hits the fan and the stock is worth toilet paper.
Oh, and heres one more "greenie" that suggested exactly what I did - that GM restart the EV1, YESTERDAY:
Autoline on Autoblog with John McElroy - HEY GM, BRING BACK THE EV1
http://www.autoblog.com/2008/06/27/autoline-on-autoblog-with-john-mcelroy/
RJ @ Jul 3rd 2008 9:19PM
While I don't agree that a car like the EV1 can survive on today's market, without serious makeovers in terms of technology, I do agree that killing the EV1 was one of the dumbest, and most short-sighted things by GM.
Really shows their lack of long term planning by their executives.
The Luigiian @ Jul 4th 2008 3:08AM
Axiom, GM's problems can't be fixed by the Volt. It literally has so many problems that it would take an act of God to keep the company afloat.
Either that or a massive government bailout. None of that would fix GM's biggest problem, though, which is terrible management
gmaccessories-direct @ Jul 4th 2008 7:05PM
The Volt is not going to make GM any money whatsoever. It will not carry them any further away from this situation.
http://www.gmaccessoriesstore.com
Mallard @ Jul 3rd 2008 7:26PM
On this post: http://www.autoblog.com/2008/07/01/by-the-numbers-june-2008-not-that-bad-edition/
it shows that GM was only -8.3%, not -18.3%. That's not too bad considering the God of automakers, Toyota, was down 11.5%.
Thedevil @ Jul 3rd 2008 7:44PM
I wonder who declared Toyota God of automakers?
i bet with all the sales decline for Toyota,they still have way more money in the piggybank than GM does.
axiom @ Jul 3rd 2008 7:59PM
Leave the fact checking for people that read the news.
"But GM sales still dropped 18.2 percent during a dismal June for most large automakers. Toyota's U.S. sales fell 21.4 percent, Ford sales tumbled nearly 28 percent and Chrysler took a huge hit for the month with sales down 35.9 percent."
http://www.wilx.com/news/headlines/22785309.html
Oh, and Toyota's sells only fell because they are running low on stock. They can't keep their highly desirable small cars on the lot for more than a few days - which is a good problem because it means sales will go and stay up they have more stock.
GM's sales are declining because their cash cow (trucks and SUVs) are now effectively "turds", leaving them a hollowed out company that killed the one product that could be making them bazillions (the EV1) right now. Of course, if they restored the EV1 they might even put Pruis sales to shame. The EV1 sh!ts all over the Volt, at 90miles per charge and reliable lead acid batteries that would cost only $1,200 to replace after 5 years (gov't rebates could cover that ez). The Volt gets less than half that per charge and the batteries will probably cost around 10K to replace after around the same period. Oh, and btw those lithium-ion batteries SERIOUSLY degrade after a couple years, while the EV1 is tried and true tech..
Even the LA Times is demanding this kind of action, if I was a GM shareholder I would to:
http://latimesblogs.latimes.com/money_co/2008/06/times-staff-wri.html
Michael @ Jul 3rd 2008 7:31PM
I should just buy GM. You can buy it for like $6bil.
HotRodzNKustoms @ Jul 3rd 2008 8:49PM
Do they accept Paypal?
MM @ Jul 3rd 2008 7:32PM
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".
montoym @ Jul 3rd 2008 7:38PM
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.
montoym @ Jul 3rd 2008 7:53PM
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.
Billy C. @ Jul 3rd 2008 8:43PM
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.
elprogramer @ Jul 4th 2008 4:35AM
^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.
Don @ Jul 3rd 2008 7:46PM
Get used to it GM. Until you decide for yourselves that your Lambda quads AREN'T the answer to $4 per gallon gas, well, then you're just deluding yourselves.
MemphisNET @ Jul 3rd 2008 7:54PM
These vehicles were in development long before this oil spike started - and assuming they can just stop building trucks/suv's all together and just magically have better cars tomorrow is retarded - so get off the 'hate american' bus.
Just like the 70's, we'll start making more efficient cars, the economy will work itself out as it always does, and 'cheap' (adjusted) fuel will be back - along with SUV's/Trucks. Hopefully this time, they will be a blend of power & extreme efficiency - along with a soft truck portfolio.
area51 @ Jul 3rd 2008 8:02PM
Maybe that's GM's end-game; fill for bankruptcy and roll out a meaner, greener car company that can then legally hose the unions and whack 2/3rds of its product line with supporting dealer network.
God I want GM to succeed - I've purchased GM products for the last 15 years - but, man, they've totally done it to themselves; short-term gains with no long-range strategy what-so-ever. Pitiful.
Everyone likes Camrys don't they?