WHY GM will blow up...

I would not write off GM. I predict they will survive in the long run.

Ford and GM have been in trouble before, Ford is actually far worse off than GM. Gm has a ton of cash and aside from trying to get past the problems created from the "BROKEN" healthcare system of the entire country and being behind in bringing out new and well engineered automobiles they will get past these problems.

Now i admit fully that i have not been following stocks on an individual basis, but if i looked at the company in depth i bet there is a viable company there. Give it time to work off the legacy problems, and there could be a nice stock for a longer term investment.

The legacy problems are not as "FIXED: as some think, that indeed is why they are wrestling with them now. Remember this: the number of present workers relative to the retired numbers are improving as we speak, robots and improved production methods do not require the mega workers they were needed when GM, Ford were the top dogs of years ago. The older folks are not going to be as numerous as they are now.

Also, the entire healthcare, defined benefits etc of ALL" corporations surely will be rewritten and fixed. There is no way around it, the system will be fixed, it must be.

The healthcare is a "NATIONAL" problem. The politicians will get there hands around the situation simply because in America we all let problems slide until there are "DEMANDS from all walks of citizens to fix the problem. This problem is bigger than just UNIONS. Unions are not the cause, they are being scapegoats.
 
The healthcare is a "NATIONAL" problem. The politicians will get there hands around the situation simply because in America we all let problems slide until there are "DEMANDS from all walks of citizens to fix the problem. This problem is bigger than just UNIONS. Unions are not the cause, they are being scapegoats.


^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^


Health Care in the U.S. is broke for one VERY SIMPLE reason --- the actual consumer of the health care does not pay the bill. for the most part either some state program, federal program, or an insurance company pays most of the health care bills --- not the person themselves --- so what happens?

"Who gives a shit how much that bill was for my broken toe --- i do not have to pay it!" {that exact mentality and the lack of normal CONSUMER based free market dynamics are killing the health care industry}. When you and every other consumer are not involved with the COST of a service like health care, then that whole industry lacks the competitive forces of DIRECT consumer pricing influence.

until the consumer is more directly involved with {is forced to care about the cost of services --- shop around for better value} the cost of his/her health care, then the whole mess is heading for a meltdown --- financially!
 
macro event

I agree 100%. you just described the WHOLE problem in a nutshell.....:)

Big business as well as small business (i pay a lot for my care) are held hostage to price gouging in every step of the system, insurance companies, the Docs, the hospital, specialists etc. it is a sick joke.....NO PUN INTENDED....:mad:
 
Gm stock could get to below $20, i remember Lockheed was yelling to the government years ago. The govt did not give them money but if i remember correctly, the govt placed their faith in some loan in case lockheed "NEEDED" the money. Lockheed was not allowed to go kaput simply because of the national defense issue. Today with all the foreign carmakers producing, in a real war, those could be nationalized .

Chrysler was bought at $9 by Kirk Korkorian (and yours truly), the issues was not national defense, simply not so cool cars. The MINI VAN saved Chrysler.

GM in a couple of years could be cool again, they are also planning big for China and the Asian mkts. GM and China have been doing a lot of work together for some time now, maybe the trees are ready to bear fruit..:) In a couple years...


"ELVIS< Has left the building"... later guys, good trading tomorrow....nice action today...:)
 
BIG step in favor of GM here...now to control expenses, deal with Deplhi, and figure out what to build for the masses.

AP
GM Auto Workers OK Health Care Proposal
Friday November 11, 12:23 pm ET
By Dee-Ann Durbin, AP Auto Writer
GM Auto Workers OK Health Care Proposal That Would Increase Amount They Pay for Services


DETROIT (AP) -- General Motors Corp. auto workers have agreed to a proposal that would increase the amount they pay for their health care, the United Auto Workers said Friday.
Hourly workers approved the proposals by a 61 percent majority, UAW President Ron Gettelfinger and chief GM negotiator Richard Shoemaker said in a brief statement.

The proposed change must still be approved by the U.S. District Court in Detroit, the statement said.
 
Quote from Trend Fader:

The stock is trading at 20x debt. GM has mind boggling $285bil in debt.

As the shares get lower liquidity becomes an issue. The company will be forced to either be bailed out by gov.. split the company into various units and be sold off.. or just file for BK and go through a multi year reorganization.

Here is the reality.. the US consumer is tired, no more cash back and no financing cheap money car deals, interest rates will continue to soar....

Horrible backdrop for GM.

--MIKE
More...

Sure.
 
It will be a while, but at the present rate, chances are a Chapter 11 could be more realistic in two years as all of their cash erodes.

Such a thing would happen if they stay on their present track. GM will do anything they can to avoid bk. When their credit ratings are lowered, banks will not let them raise more cash by offering bonds or selling more bonds. Plus more people will not want to buy them nor will institutions if their ability to pay is in question.

There is no doubt that GM has their hands full of problems be it health care, unions, low sales, questionable product, the economy and the competition. I keep saying GM will go to 15 or so, but I wouldn't be surprised to see this stock sink to 10. I think GM will probably quit paying their .50/qtr dividend in the next year if things stay this way. They can't afford to dish out a billion in cash just to regular stockholders per year, not to mention preferred holders.

I highly doubt that this new sale (Supplier Pricing) will light up the boards with sales. It's just another form of rebate and the public is numb to such tactics. Product is key, without it, people don't come into the doors. Just ask the folks at Mitsubishi. Questionable product, slower sales. Production rates for the Japanesse have gone up close to 10% year to date versus the opposite for Ford and GM. That says a lot..
 
Quote from tnewman1:

It will be a while, but at the present rate, chances are a Chapter 11 could be more realistic in two years as all of their cash erodes.

Such a thing would happen if they stay on their present track. GM will do anything they can to avoid bk. When their credit ratings are lowered, banks will not let them raise more cash by offering bonds or selling more bonds. Plus more people will not want to buy them nor will institutions if their ability to pay is in question.

There is no doubt that GM has their hands full of problems be it health care, unions, low sales, questionable product, the economy and the competition. I keep saying GM will go to 15 or so, but I wouldn't be surprised to see this stock sink to 10. I think GM will probably quit paying their .50/qtr dividend in the next year if things stay this way. They can't afford to dish out a billion in cash just to regular stockholders per year, not to mention preferred holders.

I highly doubt that this new sale (Supplier Pricing) will light up the boards with sales. It's just another form of rebate and the public is numb to such tactics. Product is key, without it, people don't come into the doors. Just ask the folks at Mitsubishi. Questionable product, slower sales. Production rates for the Japanesse have gone up close to 10% year to date versus the opposite for Ford and GM. That says a lot..
More...

Good points... GM products are clearly inferior.. its just going to take a slowing economy or some type of recession to put the nail in the coffin...

THe truth is that the past 3 years have been great for the car industry.. massive sales due to agressive pricing and cheap money, booming housing market and economy, roaring stock market.. what does GM have to show? Absolutely nothing.. heck even Chrysler is making a comeback.. and GM is hitting new decade lows in stock price and burning cash...

Going forward.. the economy will continue to weaken and things will slowly start to slow down and possibily detoriate due to expensive money... how in the world is GM going to make a comeback in this enviromnet.. if in the best of circumstances they fell on their face?


--MIKE



--MIKE
 
like i have said before --- a pig with lipstick is still a pig!

i don't care what deals the unions cut with GM, their cars are "stylistically" vacant and their days until the slaughter are numbered --- bacon anyone?
 
Quote from ssternlight:

He's playing for a breakup. The stock going lower actually doesn't hurt him long term as it forces management to make changes. It's the fund managers who get killed by GM heading down and any wrong sided hedge funds/derivative players -- although the latter have probably learned their lesson.

Having said that, he could get smoked by a true BK filing...
More...
did he buy his position with borrowed money? margin call or a collateral call
any other way he could get hurt?
thx for your previous reply
 
You must log in or register to reply here.
Back
Top