GM needs government assistance to operate

[alaskaguy]

GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing.

Link:
GM Reports Third Quarter Financial Results: Financial News - Yahoo! Finance

 

[brianhos]

Hello next bailout.

 

[bos]

bye bye GM.

 

[brianhos]

Jeez GM, I think what you need is a few more lines of products!

General Motors | GM Vehicle Search | Find your Car, Truck, or SUV

 

[bos]

GM spread themselves too thin instead of focusing on a small group of quality cars.

 

[jaretac]

I know allot of people will lose jobs, but I say, let them die. How many time have they gotten themselves into similar situations and the "government" (us) have had to bail them out. Obviously there is not a strong enough demand for the product that they are selling, why would it different with government money.

 

[Cutlass]

I'm a GM fan and surprised that they reached this point. I thought that with the improved product that they've been releasing and have in the pipe that it would turn around. But they've blown through their cash reserves much faster than I thought they could. It makes me sad.

I'm no economist, but I don't think a bailout is the best option here though. It may be time for GM to file bankrupcy and come out of it a leaner and hopefully smarter company. I'm still just shocked that they're almost out of money.

 

[4429 mcc]

I know allot of people will lose jobs, but I say, let them die. How many time have they gotten themselves into similar situations and the "government" (us) have had to bail them out. Obviously there is not a strong enough demand for the product that they are selling, why would it different with government money.

22,000 people work for GM and I have no clue how many work for their vendors.

I agree they've gotten themselves into a mess but I think the entire economy will feel the ripple effects if GM is allowed to fail.

 

[Cyclonesrule91]

Part of the reason GM is in this situation is because of CAFE standards forced by gov't in the first place. Government regulations with no funding to support it.

 

[Covenant Clone]

22,000 people work for GM and I have no clue how many work for their vendors.

I agree they've gotten themselves into a mess but I think the entire economy will feel the ripple effects if GM is allowed to fail.

Those 22,000 people can look in the mirror and partially blame themselves. The ridiculous labor unions and the crazy labor rates that GM has to pay is a big reason why they are in trouble now and the reason they had quality problems (not being able to compete with Honda and Toyota) in the past.

 

[bos]

22,000 people work for GM and I have no clue how many work for their vendors.

I agree they've gotten themselves into a mess but I think the entire economy will feel the ripple effects if GM is allowed to fail.

Those 22,000 people can look in the mirror and partially blame themselves. The ridiculous labor unions and the crazy labor rates that GM has to pay is a big reason why they are in trouble now and the reason they had quality problems (not being able to compete with Honda and Toyota) in the past.

Both valid points. The amount of assistance will go up with these people being unemployed, which I would assume would effect us all. Support companies will go out of business unless they can cut deals with other auto manufactures but I dont see alot of that taking shape. Unions are a joke these days. They seem to harbor alot of turds.

 

[jaretac]

22,000 people work for GM and I have no clue how many work for their vendors.

I agree they've gotten themselves into a mess but I think the entire economy will feel the ripple effects if GM is allowed to fail.

I understand that, but when is enough, enough? It seems like GM has had more then enough chances.

In a normal economy, the demand for cars would go up with a loss of a large manufacturer, which would in turn result in other companies success and therefore increased employment in those companies which would balance out the loss. As we all know, this is not a normal economy so it is hard to say what effect this would have.

The 10 million billion dollar question is, do you subsides a profitless company, that has had problems for a long time, in order to save jobs and keep the status quo; or do you take a chance and let them die in hopes that their absence will bring forth a more profitably company which may result in more jobs then we had with GM? My opinion, the status quo hasn't helped GM or our economy much, let's see if there is someone that can do a better job.

 

[Cyclonesrule91]

Unions are a joke these days. They seem to harbor alot of turds.

Best statement I have read today. There are a few instances where unions have some worth, but for the most part all they do is drive labor cost way up without any incentive for the worker to go up and beyond the call to earn his wage. Anytime your tenure is worth more then your on the job performance, you know the employer is screwed......:skeptical:

 

[kilgore_trout]

they probably need to go the bankruptcy route to break the union contracts, recapitalize, etc. they won't be closing the doors anytime soon.

 

[BryceC]

Best statement I have read today. There are a few instances where unions have some worth, but for the most part all they do is drive labor cost way up without any incentive for the worker to go up and beyond the call to earn his wage. Anytime your tenure is worth more then your on the job performance, you know the employer is screwed......:skeptical:

What would it take to break the union contracts? Honestly if they want to become viable in a world market and stop being a tax burden they probably need to do that.

 

[Cyclones_R_GR8]

I'm a GM fan and surprised that they reached this point. I thought that with the improved product that they've been releasing and have in the pipe that it would turn around. But they've blown through their cash reserves much faster than I thought they could. It makes me sad.

I'm no economist, but I don't think a bailout is the best option here though. It may be time for GM to file bankrupcy and come out of it a leaner and hopefully smarter company. I'm still just shocked that they're almost out of money.

I'm a GM fan also. It's easy to see how their cash reserves would be dwindling considering the buyouts they have had in order to reduce their workforce.
From what I understand the SUVs have the highest profit margin and people continued to buy them so they kept pumping them out. Once the price of oil shot up and the market dried up they were out of luck. They need to streamline their operations so they can retool quickly to accomodate the ever changing market.

 

[Cyclonesrule91]

What would it take to break the union contracts? Honestly if they want to become viable in a world market and stop being a tax burden they probably need to do that.

Good question. I would imagine there would have to be a way to break it, but have no clue how they could do it.

 

[kgreeny]

Best statement I have read today. There are a few instances where unions have some worth, but for the most part all they do is drive labor cost way up without any incentive for the worker to go up and beyond the call to earn his wage.

We use Union operators at my company, and for the most part it's a good thing. The people are trained, have good benifits and most want to work. The problem always comes when the union BA's get involved. They don't care a bit about the works and only about putting more money in there pocket. I don't like them much:skeptical:

 

[dmclone]

Part of the reason GM is in this situation is because of CAFE standards forced by gov't in the first place. Government regulations with no funding to support it.

Are you kidding me? Don't the Japanese automakers have to meet these same CAFE standards?


They've known about those CAFE standards for the last 30 years and have did very little to improve. I believe the cars have been 27.5 for over 20 years now and the new standards don't go into effect until 2011 and are just a few mpg better.

At least 75% of the big 3's problems have to do with product. Too many lines of cars and questionable quality during the 80's and 90's are a big factor.

Gm for example, I'd like to see them do the following:

Today they have over a 100 different models and about 8 different brands.

Get rid of all the brands except Chevrolet, GMC, and Cadilac

Get rid of all their cars/trucks except the following

Luxury-Cadilac
CTS-Midsize Luxury
STS-Large Luxury
SRX-Luxury Crossover
Escalade-Luxury SUV

Truck/SUV-GMC
Canyon-Small truck
GMC 1500
GMC 2500
GMC 3500
Arcadia-Crossover
Yukon-Large SUV

Cars-Chevrelot
Aveo-Small cheap car
Cobalt-Honda Civic class
Malibu-Accord class
Impala-Avalon class
Corvette-Can't get rid of this gem
Camaro-2 door sports coupe (maybe)
Sky-2 door convertable (maybe)



There you go., 17 models. Concentrate on make them the best or near the best of class and everything will be ok.

 

[bos]

I'm a GM fan also. It's easy to see how their cash reserves would be dwindling considering the buyouts they have had in order to reduce their workforce.
From what I understand the SUVs have the highest profit margin and people continued to buy them so they kept pumping them out. Once the price of oil shot up and the market dried up they were out of luck. They need to streamline their operations so they can retool quickly to accomodate the ever changing market.

This will be their biggest challenge. Where foreign manufacturers have found innovative ways change what they are manufacturing on the fly, GM still has some old plants such as in Janesville, WI that would cost a fortune to redo. They should have been spending money on updates and efficiency and not on fat checks and a huge line of automobiles.