For the record, I do too.


To some degree, I'm just thinking outloud, trying to see which is the best approach.

 

Predicted with an absolute certainty no - however the writing has been on the wall for some time now that the company should have had sufficient plans in place for such a situation.

Yet - Wagoner publicaly stated back in April/May 2008 GM expected a rebound in the US economy the second half of 2008.

Why?

In light of Peak oil concerns, Katrina, $140bbl oil, upgraded CAFE requirements in 2006 and the new Energy Act in 2007 requiring 35 mpg by 2020.

Now did GM every study why vehicle sales have been inflated for years now?

Cheap credit and the home equity ATM come to mind.

GM with GMAC had sufficient data very early to realize that was coming to a head very quickly.

GM should have seen this as early as Dec 2006 when the deal with Cerberus for GMAC was finalized. The deal was tweeked at the last minute to account for a change in asset values at GMAC. GMAC than began to imploded soon after and it self near bankruptcy.

Bear Stern's hedge funds specializing in Mortgaged Backed Securities failed in April 2007.

Northern Rock in the UK failed in August 2007 kicking off the first credit crunch.

CITI needed a capital infusion from investors before the end of the year.

Bear Sterns failed in March 08.

Big money moved away from these structured investments and into commodities driving steel, gold, oil through the roof.

The rest is history at this point.

However, the signs of big economic problems have been there well before the September collapse. Something foul has been unfolding for sometime now. Credit markets have been showing problems for almost two years now.

Yet I will repeat Wagoner as late as May 2008 expected a rebound in the second half of 2008.

The economic indicators at the time were not pointing to depression but at minimum a good old fashion recession.

I assure you the signs have been there for a while. Bubbles do not last forever and GM should have seen that coming very early as the company has been complicit in this economic fiasco with GMAC's poor lending practices.

GM is broke and yet the excuses continue. That is all I have hearing from this company for 30 years. Excuses or wait until next year.

No the economy is not to blame for GM's current condition - the company is at fault.

 

http://articles.moneycentral.msn.com...drop-dead.aspx

 

Sounds good to me.

 

Fair enough.

The more I think about it and the more I read, I've become convinced that some sort of loan, with appropriate conditions and agreements from stakeholders, is the best chance. A second choice would be partial ownership like we're seeing in the banking sector. I'm leery of that, however, for the usual reasons.

Failing that, you have liquidation, and one or multiple organizations would buy the parts they wanted (Chevy, Caddy, Holden, Opel, China Buick? -- who knows) and we'd go from there. I don't like that option, so that takes me back to option A above.