GM Still Bankrupt
Posted by Jeff Pruitt - 3/3/09 @ 10:55 pm - Filed Under Uncategorized
Back on Feb 18 GM and Chrysler released their “viability” plans to the treasury detailing how they were supposedly going to get back into the black. Here’s what I wrote after reading GM’s plan:
GM’s plan is much more detailed but the analysis is the same - they are bankrupt. Their US industry sales assumptions are ridiculous. They conveniently assume that the market bottoms out in the 1st Quarter of 2009 and gradually builds back up to bubble-economy numbers. And even under that rosy scenario they are still only breaking even by 2012 and paying off their loans by 2017.
I cannot imagine auto sales gaining the rest of this year - it makes no sense. Who is going to be buying them? Millions will lose their jobs and people will continue to horde cash - like everyone else GM seem to be banking on the magic stimulus bullet to save the day - it won’t happen.
The baseline industry sales number for their viability analysis was 10.5 million units. So what was the actual number that was reported today? A dismal 9.1 million - the lowest since 1981. GM’s sales were off 53% from a year ago.
Unless they RADICALLY reduce capacity they are probably finished…
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The trouble is, they WON’T be finished. They’ll be propped up again, and again, and again until the US Government has a controlling interest. This is waaaaay too good of a “crisis” to pass up. Democrats, liberals and evironmentalists have been trying for years to choke the shit out of the auto business, with cafe & safety regulations, and they finally have at least two manufacturers by the proverbial balls, GM & Chrysler. Can anyone honestly fathom the Democratic Congress & White House NOT seizing this opportunity in the name of “what’s best for the country and of course the planet?”
The US taxpayer is going to pay to keep them afloat, to keep UAW contracts in place, and to keep UAW wages up. That’s a given.
As GM & Chrysler become a USSA (United Socialist States Of America)government manufacturer, look for some really unappealing transportation choices in the near future.
The only American company to come out of this federal fiasco unscathed may just be Ford. If they can remain private, they’ll become America’s only private car company.
They need to file bankruptcy and sell of any remaining valuable assets. Let Toyota and Honda pick them up at bargain prices, offer non-union jobs to the ate-up-with-the-union dumbass UAW workers, liquidate it all and say good bye to the old dog.
I’ve been follow Ford’s progress. They should sell Volvo to the highest bidder to get some cash until sales turn around.
One thing I will say about the UAW, it seems those working at Ford are willing to take concessions. Big difference from the “thug attitude” of those at GM.