Some predictions about GM
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Registered User
Joined: Mar 2001
Posts: 13,713
From: The Golden State
Some predictions about GM
1. GM will be going into bankruptcy.
GM's debtload is simply too mindboggling next to Chrysler, both as a percentage of it's assets as well as it's shere size. Also, while Chrysler's problem was fairly straightforward (getting good cars that were smaller than the LX, and getting some volume to help with economies of scale), GM's is far and away more complex and built up over many years.... and papered over for many years.
2. GM won't emerge from bankruptcy in 30, 60, or 90 days, or anytime in the forseeable future.
While Chrysler went into bankruptcy with a ready made package and buyer, and the only reason Chrysler went into bankruptcy was because of less than 10% of it's debt holders, GM has a far more difficult time and far greater amount of debtholders and other intrested parties at each other's throats. Chrysler's debtholders had secured assets. GM's debtholders had bonds worth whatever the value of the paper was they were printed on. They are going to be far more aggressive in recouping losses than Chrysler's since unlike Chrysler's, the debt they hold is essentially worthless.
3. GM is at far greater risk of not reopening, or taking an extremely long time to.
The longer a car company is closed, the harder it is to reopen. Chrysler's renegade debtholders knew this when they tried to prevent moves that would keep Chrysler functioning, or quicken it's reopening. They simply wanted to liquidate Chrysler since Chrysler was more valuable in parts than as a whole. Regualr scheduled maintenence on machinary turns into an overhaul without use over an extended period of time. Paint is expensive, and needs to be replaced if not used over a certain period of time. New suppliers have to be found, and their OEM product verified. Even a small company that makes door handles that might go under can stop production until a new vendor is found and his replacements are tested by GM to meet durability and quality standards.
4. Labor unions seem to be targeting GM.
The CAW went along with Chrysler's deal. The UAW and CAW lept at the deal that Ford offered. But they are turning down GM's offers. GM's debtholders (who will wind up with less than Chrysler's) want a bigger share of GM. The UAW who now on paper own half of Chrysler want the same with GM. Meanwhile, the CAW is playing rebellious teenager against society, and bucking GM, the Quebec Government, and the Canadian Federal Government in thumbing their nose at GM's take-it-or-we'll-close-down-GM-Canadian-Operations deal. The CAW has painted themselves into a corner, and there is no way GM's debtholders are going to back an agreement similar to what Chrysler's debtholders agreed to (again, Chrysler debtholders had assets to back them up which GM debtholders do not have). It's going to be a mess.
When GM goes into bankruptcy, like Chrysler, expect GM to stop producing cars and trucks till it emerges. If you haven't got a Camaro yet, if you plan on ordering one, you might not get it.
Expect GM to be shut down the bulk of this year, starting next month.
GM's debtload is simply too mindboggling next to Chrysler, both as a percentage of it's assets as well as it's shere size. Also, while Chrysler's problem was fairly straightforward (getting good cars that were smaller than the LX, and getting some volume to help with economies of scale), GM's is far and away more complex and built up over many years.... and papered over for many years.
2. GM won't emerge from bankruptcy in 30, 60, or 90 days, or anytime in the forseeable future.
While Chrysler went into bankruptcy with a ready made package and buyer, and the only reason Chrysler went into bankruptcy was because of less than 10% of it's debt holders, GM has a far more difficult time and far greater amount of debtholders and other intrested parties at each other's throats. Chrysler's debtholders had secured assets. GM's debtholders had bonds worth whatever the value of the paper was they were printed on. They are going to be far more aggressive in recouping losses than Chrysler's since unlike Chrysler's, the debt they hold is essentially worthless.
3. GM is at far greater risk of not reopening, or taking an extremely long time to.
The longer a car company is closed, the harder it is to reopen. Chrysler's renegade debtholders knew this when they tried to prevent moves that would keep Chrysler functioning, or quicken it's reopening. They simply wanted to liquidate Chrysler since Chrysler was more valuable in parts than as a whole. Regualr scheduled maintenence on machinary turns into an overhaul without use over an extended period of time. Paint is expensive, and needs to be replaced if not used over a certain period of time. New suppliers have to be found, and their OEM product verified. Even a small company that makes door handles that might go under can stop production until a new vendor is found and his replacements are tested by GM to meet durability and quality standards.
4. Labor unions seem to be targeting GM.
The CAW went along with Chrysler's deal. The UAW and CAW lept at the deal that Ford offered. But they are turning down GM's offers. GM's debtholders (who will wind up with less than Chrysler's) want a bigger share of GM. The UAW who now on paper own half of Chrysler want the same with GM. Meanwhile, the CAW is playing rebellious teenager against society, and bucking GM, the Quebec Government, and the Canadian Federal Government in thumbing their nose at GM's take-it-or-we'll-close-down-GM-Canadian-Operations deal. The CAW has painted themselves into a corner, and there is no way GM's debtholders are going to back an agreement similar to what Chrysler's debtholders agreed to (again, Chrysler debtholders had assets to back them up which GM debtholders do not have). It's going to be a mess.
When GM goes into bankruptcy, like Chrysler, expect GM to stop producing cars and trucks till it emerges. If you haven't got a Camaro yet, if you plan on ordering one, you might not get it.
Expect GM to be shut down the bulk of this year, starting next month.
Registered User
Joined: Jan 1999
Posts: 1,547
From: Panhandle of West Virginia
All I can say is wow. When I heard that GM was paying suppliers on May 28th instead of June I figured they were headed to bankruptcy, but the picture you paint is much worse than I imagined.
****ing awesome!
Registered User
Joined: Jul 2001
Posts: 3,132
From: Santa Clara, CA
1. GM will be going into bankruptcy.
GM's debtload is simply too mindboggling next to Chrysler, both as a percentage of it's assets as well as it's shere size. Also, while Chrysler's problem was fairly straightforward (getting good cars that were smaller than the LX, and getting some volume to help with economies of scale), GM's is far and away more complex and built up over many years.... and papered over for many years.
2. GM won't emerge from bankruptcy in 30, 60, or 90 days, or anytime in the forseeable future.
GM's debtload is simply too mindboggling next to Chrysler, both as a percentage of it's assets as well as it's shere size. Also, while Chrysler's problem was fairly straightforward (getting good cars that were smaller than the LX, and getting some volume to help with economies of scale), GM's is far and away more complex and built up over many years.... and papered over for many years.
2. GM won't emerge from bankruptcy in 30, 60, or 90 days, or anytime in the forseeable future.
The key is to get everything ready before the 363 papers are filed. Remember that the UAW and CAW didn't agree to the contracts with Chrysler until just before the due date, which was April 30 for Chrysler and May 30 (really either the 29th or June 1st) for GM.
The UAW and CAW will agree, because the alternative is no jobs and an unfunded VEBA.
Registered User
Joined: May 2004
Posts: 2,043
From: Shelbyville, IN
I would be perfectly content with:
GM Powertrain
Chevrolet
Cadillac
IMO the rest of GM could die and it wouldn't bother me. Just rebadges of the same ****. GM paved this path long ago when they made all their brands just a different skin of another model... The brands in GM have no identity save Chevrolet and Cadillac.
GM Powertrain
Chevrolet
Cadillac
IMO the rest of GM could die and it wouldn't bother me. Just rebadges of the same ****. GM paved this path long ago when they made all their brands just a different skin of another model... The brands in GM have no identity save Chevrolet and Cadillac.
Registered User
Joined: Jul 2004
Posts: 1,496
From: Roseville, MI, USA
Guy, do you know how a 363 bankruptcy works? Most of what you wrote just does not apply. Or rather, the conclusion does not apply. In a 363, someone buys the parts they want, very quickly -- in 30 days typically. The remainder can be stuck for years while the courts sort it out. But the important part -- the part making Camaros, for example -- goes back into operation very quickly.
The key is to get everything ready before the 363 papers are filed. Remember that the UAW and CAW didn't agree to the contracts with Chrysler until just before the due date, which was April 30 for Chrysler and May 30 (really either the 29th or June 1st) for GM.
The UAW and CAW will agree, because the alternative is no jobs and an unfunded VEBA.
The key is to get everything ready before the 363 papers are filed. Remember that the UAW and CAW didn't agree to the contracts with Chrysler until just before the due date, which was April 30 for Chrysler and May 30 (really either the 29th or June 1st) for GM.
The UAW and CAW will agree, because the alternative is no jobs and an unfunded VEBA.
No, it won't take 30 days like Chrysler is looking like it will. Instead 90 days is a better guesstimate. I say guess because that's all we can do. Not one person here is a bankruptcy expert, a bankruptcy judge, and even if somebody was this bankruptcy has one big difference no other does:
The involvement of the U.S. Government.
