Is GM going the way of Delphi?
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Is GM going the way of Delphi?
It seems like today that everyone is yelling from the tops of the hills that GMs bankruptcy is around the bend just bcuz of Delphi. I'm sure it won't be easy for them, but bankruptcy for GM?
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Re: Is GM going the way of Delphi?
You would think some people would be pleased to see GM go under. 
Originally Posted by CNBC.com
Could GM go bankrupt?
After Delphi's Chapter 11 filing, one analyst sees a 30% chance the automaker will also seek protection. GM is down more than 4%. IBM, Wal-Mart and Home Depot all benefit from positive commentary.
General Motors (GM, news, msgs) sank more than 4% at midday on worries about pension liabilities, as its former auto-parts unit, Delphi (DPH, news, msgs) filed for bankruptcy.
Overall, stocks are treading water, with the bond market closed for the Columbus Day holiday. The Dow fell 0.1%, with GM's weakness countered by positive comments on other components. The Nasdaq composite lost 0.34% and the S&P 500 index dropped 0.46%.Start investing with $100.
Banc of America cut GM to "sell" from "neutral" and analyst Ronald Tadross increased the chance of the automaker filing for bankruptcy to 30% from 10%. Tadross also cut his price target to $18 per share from $32 per share.
"We think GM's biggest supplier's recent bankruptcy filing should raise GM's retirement liabilities by at least $6 per share,'' he in a research note.
GM, which spun off Delphi in 1999, faces a liability of up to $11 billion for pensions and benefits due to workers, The Detroit News reported. But GM said it may not be responsible for any of Delphi's union obligations, setting up a possible battle, the paper said.
GM said it expected no immediate financial impact due to Delphi's actions and it "is
evaluating whether it is possible to reasonably estimate the financial impact that the corporation may eventually sustain, if any, due to the benefit guarantees."
The automaker has $38 billion in cash and assets on hand, so liquidity is not a problem, CNBC's Phil LeBeau reported. Most people are saying chances of bankruptcy are quite remote, but that could change if negotiations over benefit restructuring with the United Auto Workers fail and a work stoppage occurs, LeBeau said.
After Delphi's Chapter 11 filing, one analyst sees a 30% chance the automaker will also seek protection. GM is down more than 4%. IBM, Wal-Mart and Home Depot all benefit from positive commentary.
General Motors (GM, news, msgs) sank more than 4% at midday on worries about pension liabilities, as its former auto-parts unit, Delphi (DPH, news, msgs) filed for bankruptcy.
Overall, stocks are treading water, with the bond market closed for the Columbus Day holiday. The Dow fell 0.1%, with GM's weakness countered by positive comments on other components. The Nasdaq composite lost 0.34% and the S&P 500 index dropped 0.46%.Start investing with $100.
Banc of America cut GM to "sell" from "neutral" and analyst Ronald Tadross increased the chance of the automaker filing for bankruptcy to 30% from 10%. Tadross also cut his price target to $18 per share from $32 per share.
"We think GM's biggest supplier's recent bankruptcy filing should raise GM's retirement liabilities by at least $6 per share,'' he in a research note.
GM, which spun off Delphi in 1999, faces a liability of up to $11 billion for pensions and benefits due to workers, The Detroit News reported. But GM said it may not be responsible for any of Delphi's union obligations, setting up a possible battle, the paper said.
GM said it expected no immediate financial impact due to Delphi's actions and it "is
evaluating whether it is possible to reasonably estimate the financial impact that the corporation may eventually sustain, if any, due to the benefit guarantees."
The automaker has $38 billion in cash and assets on hand, so liquidity is not a problem, CNBC's Phil LeBeau reported. Most people are saying chances of bankruptcy are quite remote, but that could change if negotiations over benefit restructuring with the United Auto Workers fail and a work stoppage occurs, LeBeau said.
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Re: Is GM going the way of Delphi?
Originally Posted by mastrdrver
You would think some people would be pleased to see GM go under.
I've seen some of them refer to the import companies as if they lived in Japan. Saying "we" know how to build cars better. Reality check- you're an american living in america.
They see it as a war in which they'd like to see GM lose, without knowing the consequences.
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Re: Is GM going the way of Delphi?
Even if GM filed for BK it wouldn't happen til 2007 at the soonest. GM has alot riding on new 06 fullsize trucks and SUV and it will take some time to see if the sales/profits live up to expectations with high gas prices and all.
While GM BK'ing would a bad symbol of the loss of Americas dominance in manufacturing, but in the end GM would most likely emerge as a better company after their reorganization.
The biggest problem or benefit of GM BK'ing will be that it will send shockwaves through the stock market, be on the cover of every magazine , and will force politicians to take some form of action even if its up being more ceremonial then anything else.
While GM BK'ing would a bad symbol of the loss of Americas dominance in manufacturing, but in the end GM would most likely emerge as a better company after their reorganization.
The biggest problem or benefit of GM BK'ing will be that it will send shockwaves through the stock market, be on the cover of every magazine , and will force politicians to take some form of action even if its up being more ceremonial then anything else.
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From: Marlton NJ
Re: Is GM going the way of Delphi?
Originally Posted by camarofan91
If gm decalred bankruptcy how would that effect them?
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Re: Is GM going the way of Delphi?
GM isn't going bankrupt anytime soon, and GM most certainly isn't anywhere near going under. I'm not saying this as a GM cheerleader, but taking an honest look at GM and what it would take to bring them down.
*GM has a massive amount of assets to borrow off of.
*GM is simply way too big to go under. Puny AMC took over 7 years to sink. Studebaker took over 10, and they even manage to merge with Packard in the process. The Firestone-Explorer fiasco, bad intros with Focus & Thunderbird, and their V6 recall cost Ford billions, and they didn't even come close to going down.
*Unlike previous GM downturns, GM is actually cutting other costs to fund new vehicles, instead of the other way around.
*The UAW & CAW actually seem to be coming to grips with the situation, and are making some well thought out compromises. GM could declare bankruptcy if the union became immoble in their demands next round (2007, if I remember), but I don't see GM doing this in the immediatre future.
GM has alot to work with. They have plenty of assets to sell, plenty of areas to spin off, and has a lot of downsizing it can do before it's going to end belly up.
Unless the world economy caves in, a terrorist detonates a nuclear bomb in Detroit, "Bird Flu" or any disease wipes out the population at the levels of the Bubonic Plauge (about 1/3 the population), it's going to take decades of mismanagement to kill GM.
*GM has a massive amount of assets to borrow off of.
*GM is simply way too big to go under. Puny AMC took over 7 years to sink. Studebaker took over 10, and they even manage to merge with Packard in the process. The Firestone-Explorer fiasco, bad intros with Focus & Thunderbird, and their V6 recall cost Ford billions, and they didn't even come close to going down.
*Unlike previous GM downturns, GM is actually cutting other costs to fund new vehicles, instead of the other way around.
*The UAW & CAW actually seem to be coming to grips with the situation, and are making some well thought out compromises. GM could declare bankruptcy if the union became immoble in their demands next round (2007, if I remember), but I don't see GM doing this in the immediatre future.
GM has alot to work with. They have plenty of assets to sell, plenty of areas to spin off, and has a lot of downsizing it can do before it's going to end belly up.
Unless the world economy caves in, a terrorist detonates a nuclear bomb in Detroit, "Bird Flu" or any disease wipes out the population at the levels of the Bubonic Plauge (about 1/3 the population), it's going to take decades of mismanagement to kill GM.
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Re: Is GM going the way of Delphi?
Originally Posted by guionM
it's going to take decades of mismanagement to kill GM.
::we will be back after a short commerical break::
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From: South Jersey
Re: Is GM going the way of Delphi?
Originally Posted by guionM
... it's going to take decades of mismanagement to kill GM.
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Re: Is GM going the way of Delphi?
Originally Posted by guesswhoo
Let's get your opinion on this question. Rate the big 3 in order to which you think would file first. (1-2-3)
::we will be back after a short commerical break::
::we will be back after a short commerical break::
1) Chrysler was robed of all its cash by MB and MB is still tanking
2) GM has spent a lot fixing things
3) Ford has a lot of cash from what I have heard, but it has been a couple years
Last edited by mastrdrver; Oct 10, 2005 at 06:04 PM.
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Re: Is GM going the way of Delphi?
Originally Posted by Buickman
GM would rather go bust than try Return to Greatness. Although there is no cost involved, they still refuse. What does that tell you?
Who is John Galt?
Who is John Galt?
Wait for it. He will blame Wagner for the downfall of GM in his next post!
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Re: Is GM going the way of Delphi?
Originally Posted by CNBC.com
But GM said it may not be responsible for any of Delphi's union obligations