Regardless of the restructuring plan, the auto companies -- in particular GM and Chrysler -- may be in serious trouble within the next few months. GM would be unlikely to be able to file Chapter 11 according to some analysts, so the company would be forced to liquidate all its assets to pay off parts suppliers whom it has been borrowing from and then exit the market in a worst case scenario. Such a development would be devastating for the already struggling U.S. economy. It states, "Failure by GM will likely trigger catastrophic damage to the U.S. economy."
And failure may indeed come if GM does not get the $4B USD loan it’s requesting. It says it will go out of business by the end of the year, otherwise, as it will run out of cash. It's saying that it will need to borrow $18B USD over the next year in order to stay in business and restructure.
GM's CEO Rick Wagoner came to Washington yesterday along with the CEOs of Ford and Chrysler to try to convince the government to give it an emergency bailout loan. He drove a test mule of the Chevy Volt for part of the trip, one of the most anticipated vehicles in GM's upcoming green lineup.
Congress has already received GM's plan and it details some big changes. While GM says it won't go for a "quick fix", it says it will largely move out of the truck and SUV market and produce primarily small vehicles, as well as continuing to invest in alternative energy. The company will also now focus almost exclusively on Chevrolet, Cadillac, Buick and GMC.
GM's Saturn, Saab, and Pontiac brands will likely be cut in the near future. Pontiac, already down to five vehicles, is being designated a "specialty brand" which could lead to an eventual phase out. GM is looking to sell Saab. GM is going to "explore other options" with Saturn, presumably either a sale or a phase out.
While not getting into detailed specifics, GM, unlike Ford, has pledged to cut deeper into its salary load and manufacturing, indicating that many more job cuts are in store. Even CEO Wagoner is taking a paycut to $1/year total compensation and the company has pledged to sell or lease all seven of its private jets.
In its eleventh hour, GM is drawing some criticism from some analysts. They say that CEO Rick Wagoner, after serving for eight and a half years should resign. They suggest COO Fritz Henderson as a more aggressive successor that could turn the company around. They also suggest that the company change its name to Chevrolet Motors, as the fact that no cars are sold under the GM brand name is cited as a cause of customer confusion. They also argue that GM should reorganize into a holding company to soften the blow of bankruptcy.
Additionally the majority of the public was found in a recent opinion poll to be opposed to the bailout, with the primary reasons being that they did not feel the collapse of GM or Chrysler would affect them directly and that they felt the auto executives were irresponsible in receiving perks such as private jets.
quote: [..] the Chinese were circling Buick's salivating [..]
quote: [..] Chinese were [..] paying in cash.
quote: Bush should have been impeached, as he was pulling strings and keeping secrets, as should have Clinton.
quote: Our hope lies on Obama
quote: But i do think he has more principles then Bush or Clinton.
quote: make the required concessions or lose all of their jobs.
quote: Not to mention the Vue holds two more gallons of gas.
quote: Not to mention the Vue holds two more gallons of gas. That can affect interior room. Especially cargo and rear seat room.
quote: It regularly gets 30 MPH on long distance trips at freeway speeds, too.
quote: No, they are not. GM stopped trying in the 1960's.
quote: Maybe the brand will benefit from some fresh non-GM thinking...
quote: If the Vue is a good seller then rebadge it as a Chevy and call it a day.
quote: Saturn Vue = Chevy Equinox = GMC Terrain = Opel Antara
quote: Granted, BMW are overpriced, but on the other hand your Pontiac will be almost worthless in 6-7 years... If its running at all.
quote: Get with the times, late model GM is just as good as the import competition
quote: There is a damn good reason American cars lose their resale value at a vastly faster rate than their Japanese counterparts and it ISNT because of being slandered on the internet - its because of poor quality
quote: And my GTO will kick the crap out of even the 335i.
quote: It'd be about a dead heat between me and a new M3 too.
quote: Thus speaks someone who has never looked at autocross results from a GTO or Vette...
quote: But if the Big 3 ceased operation (which would take decades, even if they all filed Chapter 11 tomorrow), people who would have bought their cars would instead buy more Toyota, Honda, and others. Those companies would buy more parts, hire more workers, etc.
quote: Every company that's received a government bailout has eventually either failed or come back for even more money later. Usually both.
quote: The greater good is best served by giving these companies the loans that were approved for them by the government back in August.
quote: Basically, the country would be f'd for a long while.
quote: How is that even possible (give if they are both of the same year/classification)? They are the same dang trucks with a different grille. It's just a fluke. Hell, I think they're built side by side in the same plant.
quote: However, all of them agree that US cars are way better than Chinese made vehicles hahaha
quote: a few years ago...
quote: While GM says it won't go for a "quick fix", it says it will largely move out of the truck and SUV market and produce primarily small vehicles, as well as continuing to invest in alternative energy. The company will also now focus almost exclusively on Chevrolet, Cadillac, Buick and GMC.
quote: I agree with getting rig of GMC, it is just a duplicate of chevy trucks/SUV's. Even after this statement of them phasing out trucks/SUV's why would they keep GMC???
quote: Buick is pretty worthless too. Their only competitive model is the Enclave. And the last time I checked, they only have three models total, two of which (the Lucerne and Lacrosse) aren't really competitive within their respective classes -- not to mention they're built on ancient platforms.
quote: "pointing out the fallacies of other economies doesnt prove the benefits of capitalism"It most certainly does
quote: Sounds good to me. What do you suggest?