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It's hard to believe GM will not ask for more money under worst-case economic scenarios. Yes, GM is working to get the necessary concessions it needs from the United Autoworkers. It also is attempting to shed both brands and models, having put its Hummer nameplate on the auction block and Saturn and Saab on review for a similar treatment. The market is well aware of these efforts, and they are certainly a step in the right direction.
Maybe the government bailout money coupled with the market's positive response to December sales figures, which were bad but not as bad as expected, has given GM a false sense of security because GM is banking on the idea that sales aren't going to get worse than December. GM CEO Rick Wagoner and the board must be living in a vacuum because the economic forecasts are brutal. The latest unemployment numbers from an Automatic Data Processing Inc. and Macroeconomic Advisers survey released Wednesday say that 663,000 Americans lost their jobs in the month of December alone. That's a big number, and economists predict it will only increase. In fact, the Federal Reserve earlier this week warned that the first half of the year will be bad and recovery may not begin until early 2010 with high unemployment continuing into 2010. In a recession, no one rushes out to buy a new car unless it is absolutely necessary. Maybe GM should just show some immediate results before making any bold statements concerning its future -- and December's slightly better-than-expected sales figures don't count. Realistically, GM's future seems more day-to-day than anything else. GM has a penchant for changing its tune faster than Mr. Goodwrench can change the oil in a Chevy Malibu. Remember when the company announced in early December plans to sell its fleet of corporate jets? The announcement came only two weeks after Wagoner was lambasted for using one of the planes to travel to Washington to ask for government bailout money. We'll wait and see. Maybe a couple of months from now GM will make an about-face and ask for money it said it didn't really need. - Gerald Magpily See Bloomberg article CategoriesComments
From: UselessUAW,
Great job? Here's their net income the past 4 years. Here's what they've lost so far in 2008: More job losses = less sales. AWESOME JOB.
Posted on:
January 8, 2009 10:35 AM
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Does General Motors Corp. really know where its financial footing is? Company spokesman Greg Martin told Bloomberg News Tuesday: "The U.S. Treasury's $13.4 billion bridge loan to GM,
coupled with the separate transaction for GMAC, meets our
liquidity needs under the scenarios outlined in our December
plan to Congress." But can the market really believe the Detroit automaker's words considering its numerous snafus that have put the company in its precarious situation in the first place? 
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So, basically you don't think auto sales will be 10.M SAAR in 2009. That's crap. It will be more, especially in the second half. GM is right on with their projections and will not have to come back. They have done an absolutely fabulous job with their massive modernization and global platforms that are now the envy of the world. Great job GM. Looking for you first profitable quarter as early as first quarter 2010.