GM Bankruptcy

[Dasher]

Why do I feel like somebody died?

[Texas Jim]

I thought I was the only one that felt that way.

I thought feeling that way was kind of silly...but I feel like an old friend that I had known for a long time, just died.

[BodybyFisher]

I have been miserable since the election and it continues to get worse.

[JimD]

The writing has been on the wall for more than 5 years. The collapse of credit availability during 2008 was the straw that broke the camel's back. Otherwise, some other 'non-Detroit' event would have produced the same end! GM management and UAW management have been agreeing to pie-in-the-sky forecasts and projections for years.

GM will emerge and I predict you and I will have a choice of Cadillac or Chevrolet. Period. My choice will be to keep my '98 model on the road as long as I can safely do that.

Cheer up folks. We survived 8 years of Arkansas Willy; we can survive this bump in the road. The glass is half full.

[Texas Jim]

JimD,

I pretty much agree with what you said.

I am hoping for a little bit more choice than just Chevy and Cadillac.

Maybe Chevy, Buick, Cadillac and GMC.

But you are right...the glass is half full.

[BodybyFisher]

The writing has been on the wall for more than 5 years. The collapse of credit availability during 2008 was the straw that broke the camel's back. Otherwise, some other 'non-Detroit' event would have produced the same end! GM management and UAW management have been agreeing to pie-in-the-sky forecasts and projections for years.

GM will emerge and I predict you and I will have a choice of Cadillac or Chevrolet. Period. My choice will be to keep my '98 model on the road as long as I can safely do that.

Cheer up folks. We survived 8 years of Arkansas Willy; we can survive this bump in the road. The glass is half full.

Thanks Jim, I have always looked at the glass as half full

[MrEldo97]

Sad day. I ncompetent management will get you every time. BO's a problem and we all have to "hunker down" and wait until the s**t storm is over...

[BodybyFisher]

Sad day. I ncompetent management will get you every time. BO's a problem and we all have to "hunker down" and wait until the s**t storm is over...

Ditto that

[MrEldo97]

As much as I hate to see GM in Chapter 11 I can't help but remember the many times they have shot themselves in the head these past 35 years. GM has only started to buld half decent cars during the past ten years or so. The junk they built in the '70s, 80s, 90's and the management mistakes they made one after another without ever seeming to learn from their previous stupd disaster forced one to ask when the inevitable would happen. I'm not sorry to see Rick Wagoner go - Roger Smith, Bob Stempel...

[Dasher]

ONLY IN AMERICA.Do WE SPEND BILLIONS BECAUSE WE CAN'T LET GM AND CHRYSLER GO BANKRUPT, AND THEN, LET GM and CHRYSLER GO BANKRUPT.

[chazglenn3]

Well, I just saw a commercial entitled "GM Reinvention". Looks like you were right on Jim. They are starting over with only Chevrolet, Cadillac, Buick and GMC. There is a website www.gmreinvention.com

[JohnnyG]

Dear John G,

First off, I'd like to thank you for being a GM customer. Your current and future business means a lot to us. Given all of the recent media coverage about GM, I am writing you today to address some questions you may have, and to assure you that we are here to stay and ready to serve you.

As you may know, GM is using an expedited, court-supervised process to accelerate the reinvention of our company. At the core of that reinvention is a commitment that we will put the customer first in all that we do — starting with great cars, trucks and crossovers, and the best sales and service experience possible. We want to earn your trust in several ways, including:

Your GM Warranty — Rest assured, we will honor the warranty commitment given to you at the time of your purchase. Our GM Dealers are very much open for business, and ready to meet your sales and service needs. And even though we are seeking buyers for our Saturn and Saab brands, have just announced the selection of a buyer for the HUMMER brand, and have decided to eventually phase out Pontiac, those dealerships also remain open and ready for service. The bottom line is your warranty will be honored and service will always be available through authorized GM retail facilities by GM-trained Goodwrench experts, with Genuine GM Parts on hand.

Your Next GM Vehicle — At this, the most important moment in the history of our company, our dedication to high-quality, fuel-efficient and outstanding-value vehicles has never been greater. As I said before, our GM dealerships are very much open for business, and banks and credit unions are lending and continue to offer some of the best rates available to qualified buyers. To find information about GM dealerships in your area, please visit GM.com/vehicles/dealer.

Your General Motors — For over 100 years, GM has fueled America's passion for the automobile. Propelled by the spirit and commitment of our people, we will become the New GM, a company that makes Americans proud, and one that can compete successfully with anyone in the world. All of us at GM are confident that we will emerge a leaner, stronger company for you, offering the most compelling vehicles possible from our Chevrolet, Buick, GMC and Cadillac brands. I invite you to stay up to date on our promising new future by visiting GMreinvention.com.

As I said at the outset, we are genuinely grateful for your business, and we hope that you'll stay with us. If you are considering buying a new vehicle, please review a special offer for our owners. Then, visit GM.com/owner to see how this can be combined with other current incentives — it's our way of saying "Thank You" for your ongoing support.

Sincerely,

Troy Clarke, President, GM North America

Maybe it will be OK after all.

[JimD]

I have been critical of GM management and UAW management in recent posts regarding pie in the sky sales forecasts and projections. No matter what sequence of events delivered the Detroit Three to this tipping point (yes, you can include Ford), the business model of the global automobile industry will be dramatically redesigned in the next five years.

The following (from the AP) is the canary in the coal mine.

* * * * * * * * *

GM's dismantling opens doors for foreign carmakers (AP)

DETROIT – Roger Penske is inventing a new business model on the ruins of General

Motors Corp. The auto racing magnate and mega dealership owner is snapping up

Saturn and opening his expanded sales network to foreign automakers looking to

sell cars to Americans.

The deal announced Friday is another example of how the cataclysm that hit

Detroit's three carmakers is reshaping the global automotive landscape in

profound ways, reducing their worldwide influence and — if Saturn turns out as

Penske envisions — opening new markets to smaller companies.

"There's no doubt that the automotive deck chairs are changing," said Michael

Robinet, vice president of CSM Worldwide, a Detroit-area auto industry

consulting firm.

In the shake-up, well-known brands are changing flags quicker than an oil tanker

in pirate-infested waters. Italy's Fiat SpA is waiting for U.S. courts to

approve its acquisition of Chrysler LLC's assets. GM has worked deals to turn

its German subsidiary Adam Opel GmbH over to a Canadian auto parts company with

Russian backing. And Hummer may be going Chinese, although state media there

reported Friday that the deal has hit regulatory hurdles.

Yet industry experts are doubtful that the flurry of mergers and alliances will

be any more durable than failed marriages of the past, proving to be just one

big distraction from the underlying issue that made them so vulnerable in the

first place: making more cars than people can buy.

Still, Penske, who already runs Penske Automotive Group Inc., the second-largest

U.S. dealer network, thinks his business model is different enough to be

successful.

GM and Penske expect to close the Saturn deal in the third quarter, with the

wounded Detroit automaker continuing to build three models for Saturn to

distribute.

Key to its success, though, will be the ability to sign on other global

manufacturers to make cars for Saturn, giving it a diverse portfolio of vehicles

that will sell whether gasoline prices are high or low.

But by opening the door to automakers not now in the U.S., such as France's

Renault, Penske could alter the market here, allowing smaller automakers to

compete against Detroit.

Penske, in an interview with The Associated Press, said foreign automakers would

be key to his business model, but they will have to match GM quality standards

before Saturn's 350-dealer network will distribute their products.

"As people around the world look at that, they have the opportunity to tap us on

the shoulder and say 'we have product that we'd like to bring into the U.S.,'"

he said.

Other foreign automakers who have succeeded in the U.S. began with a

distribution network, then started manufacturing operations, he said.

Honda Motor Co., for example, started selling motorcycles at a few U.S.

dealerships in 1959, then imported cars as its dealership ranks grew. But the

Japanese company didn't build vehicles in the U.S. until 1979, when it opened a

motorcycle plant in Marysville, Ohio, that later grew to build the popular

Accord sedan.

Penske said he expects to begin making money immediately on Saturn, which has

never been profitable for GM.

"I would expect that the model that we're putting together, the distribution

model, will be profitable Day One," he said. "We'll have less costs. We'll not

be in the manufacturing side of it."

Fiat's takeover of Chrysler, in its final stages, follows a more traditional

logic. CEO Sergio Marchionne has been studying U.S. plants for ways to raise

efficiency, and will retool one so he can start making the stylish compact Fiat

500 and a sporty Alfa Romeo or two. Under terms of Chrysler's bankruptcy plan,

it will close five more U.S. plants.

In Europe, the Opel deal was reached under enormous political and union pressure

to keep open all four German plants — which appeared to be one of the things

that knocked Fiat out of political favor with early reports that it would close

an engine factory. The winning bidder, Magna International Inc., has pledged to

cut just 10,000 GM Europe jobs — a number eventually matched by Fiat.

But that deal is still not final. Fiat restated its interest Friday, although

German officials downplayed prospects of Magna failing to complete the takeover.

Marchionne's aim had been to combine Chrysler and Fiat with GM's European

business to create a world automotive powerhouse to produce up to 6 million cars

a year, his threshold for surviving toughening world market conditions.

Such strategies have raised the obvious question among analysts: If the industry

is being strangled by overproduction, why not just let the gasping giants

expire?

For years, the U.S. auto manufacturing base has been too large for the market,

forcing automakers to overproduce to keep plants running and flooding the market

with vehicles. As a result, the Detroit Three especially have been forced to

discount vehicles to sell burgeoning inventories.

But Penske said the continued restructuring by Chrysler, GM and Ford Motor Co.

should solve that problem, at least in the U.S.

"I think there's no question that this re-engineering of the manufacturing base

in the U.S. by the Big Three will take capacity out," he said. "But more

important, the plants that will survive will be the ones that are most

efficient."

Yet London-based Morgan Stanley analyst Adam Jonas said he does not expect

worldwide capacity to be significantly changed a year from now. And he

questioned the logic of gathering brands under one roof without real synergies.

"Did we just hook up five or six companies that don't mean anything? To get

common distributors, development, common planning, common everything, it takes a

lot of time, a lot more money and a lot of risk," Jonas said.

Worldwide, analysts say automakers have the capacity to produce 18 million to 20

million more cars than the market demands, leaving many plants grossly

underutilized. To make money, automakers have to run their plants above 90

percent capacity, but few are doing that in a depressed global market.

Nearly 70 million cars and light trucks were produced worldwide in 2007, when

the latest figures are available from the International Organization of Motor

Vehicle Manufacturers.

Ferdinand Dudenhoeffer, director of the Center for Automotive Research in

Gelsenkirchen, Germany, said capacity will need to shift to emerging markets

such as India and China, not saturated markets like the United States and

Europe, where most of the dealmaking is centered.

All the changes brings to mind past unhappy auto mergers: Ford with Land Rover

and Jaguar, Chrysler with Germany's Daimler AG, and General Motors with Fiat.

A big exception, Dudenhoeffer said, is Volkswagen AG, which gathers multiple

brands from Bentley to Lamborghini to Skoda under one roof. "But it took 20

years to bring them onto the same technical platforms," he said.

Analysts say bigger isn't always better, as evidenced by GM's efforts to shrink

itself to become profitable.

"The story of consolidation is not the story which drives the car world,"

Dudenhoeffer said. "If you look at a company like Porsche, the most successful

car companies in the world are small."

[BigTyler]

if something does go wrong with GM or they do end up going under. what will what mean to us? will there be less replacement parts and/or service for our cars? im a bit worried. also i just want you all to know that this was the first site i visited on my brand new laptop i got for graduation lol. i came right on caddyinfo when i turned her on.

[adallak]

Sad day. I ncompetent management will get you every time. BO's a problem and we all have to "hunker down" and wait until the s**t storm is over...

I am afraid it is not just incompetent management. How would all big three be incompetent?

[MrEldo97]

Look at the corporate cultures and the mistakes the management of those companies made time and again over decades.

How can one not say the not so "Big 3" haven't been victims of their incompetence?

And FORD isn't in great shape either - just look at the debt they're carrying.

The point someone else made about overcapacity is another cause (symptomatic of incompetent management...).

GM in particular is guilty of this. The rental fleets are just jammed full of Pontiacs for example. And then they're dumped on the used car market

depressing prices and making the situation worse.

Another point:

How FIAT is going to succeed with Chrysler is the $64,000.00 question. Their joint venture, ARDONA, with Chrysler in the late '80s until ALFA left North America in '95

was an unmitigated disaster in every sense of the word.

[BodybyFisher]

This may have been around a few days but I have begun seeing Government Motors in the press

[BodybyFisher]

ONLY IN AMERICA….Do WE SPEND BILLIONS BECAUSE WE CAN'T LET GM AND CHRYSLER GO BANKRUPT, AND THEN, LET GM and CHRYSLER GO BANKRUPT.

I have thought about this. Banks pulled their credit lines because of the fear of losing their capital as the result of Bankrupcy, but the Government, in its infinite wisdom went ahead and GAVE them, I dont even want to say LENT them, billions to avoid bankrupcy only for the inevitable to occur a few months later.

At the time, if you recall, it was necessary to RUSH to make a decision to give GM billions so that our ECONOMY would not be brought down by their failure.

If I recall, this occurred during the campaign, with McCain and Obama running to Washington. I spoke to a friend about this the other day and she said, YEA, its BUSH's FAULT, it happened during his term, he gave them billions....... You know, I NEVER understood his allowing that to happen under his watch, its illogical.

If GM went through a standard bankrupcy, they could have had a clean slate, unemcumbered themselves from Union control and had a TRUE fresh start.

But instead, the government got involved and allowed a 'managed' bankrupcy, SAYING they wont get involved with DAY TO DAY management but they own 60 percent.

This government does not like the US making itself independent by drilling for oil, had allowed the US to become dependent upon to Middle East for oil giving them $700 billion a year instead of keeping the revenue HERE, this is a government currently controlled by environmental groups that does not like SUVs, or nuclear power, a government that has Global Warming believers that believe Cap and Trade is the answer.

Government Control, its funny, the so called RIGHT WING KOOKS were so criticized, during the campaign for fear mongering when they dared to utter the words Socialism, Marx, big government, and I myself was criticized by a member for suggesting such a thing. Polititians have been demonizing big corporations for years. During the campaign, the oil companies took lots of abuse for increases in profit when the gas price soared and the critics did not stop for a moment to realize that when the price increases so does the profit when its a fixed profit percentage, instead they just trashed the companies.

I am so angry at how superficial we have become as a society. In depth analysis has disappeared from the discourse. Then I sit back and look at how bad things are right now in so many ways, and we are making things worse. Just a few years ago, China was admitted to the WTO. Currently they manufacture virturally everything we use, I am even SHOCKED to find out that more and more food comes from China. There was a time when we would not allow ourselves to be vulnerable to a communist nation. China owns a LARGE percentage of our NATIONAL DEBT. Does anyone think that because they own that debt that THEY wont have influence on our POLITICS? Its time to do some indepth thinking of you ask me

Well here is an article by Michael Moore that you all should read because he suggests to our President, what GMs future should be

http://www.michaelmoore.com/words/message/index.php

[MrEldo97]

Regarding the Red Chinese: When I was a boy my first nations great-grandparents were still alive. My beligerent, unassimilated

Abenaki great grandmother (still at war with the white man) told me "look at us, we beg the necessities of our daily life from our enemy. We are his slaves". How true...

I'm disgusted with what we've become and hope I can ride out this s**t storm with little damage.

[KHE]

Here's my take... The economic problems all started with the ridiculously high oil/gas prices. Every time there are high energy prices, a recession follows - 1973-1975 recession following the Arab oil embargo, '81-'82 following the skyrocketing oil prices of the late 1970s, etc. People couldn't cut back on fuel - they need to get to work so they cut back on other things to attempt to make up the difference. One such item was new cars. Another was mortgage payments - particularly for those who purchased more house than they could afford. The banks loaned money to those knowing it was a "house of cards" that could tumble if one thing went wrong with a borrower's finances.

The default rate on mortgages went through the roof so banks made it difficult to obtain credit - so new car sales plummet and enter the current situation with the automakers.

Moore is such a bloated gas-bag idiot. He can't even get his facts straight. His hatred for GM stems from his preconcieved notion that GM destroyed Flint, MI. There were FAR greater forces at work destroying that city than GM consolidating in the 1980s...

[BodybyFisher]

Kevin, dont get me wrong, I am not a MOORE fan, I was pointing out how the LEFT views GM. Given that OB says one thing and does another, it concerns me

[KHE]

Kevin, dont get me wrong, I am not a MOORE fan, I was pointing out how the LEFT views GM. Given that OB says one thing and does another, it concerns me

I wasn't implying you were a Moore fan. I just couldn't resist taking a shot at that cretin.

[BodybyFisher]

Kevin, dont get me wrong, I am not a MOORE fan, I was pointing out how the LEFT views GM. Given that OB says one thing and does another, it concerns me

I wasn't implying you were a Moore fan. I just couldn't resist taking a shot at that cretin.

ditto