Okay folks, GM dropped to $4.36 today after a high in February of about $28. I hope you’re all strapped in. It’s going to be a bumpy ride.
I’m a bit worried about my 2000 Chevy Blazer… will it stop running if they go bankrupt, similar to how the airplanes fell out of the sky 12AM on Jan 1, 2000? :^P
Tho it’s quite possible that their 5-yr / 100K warranty won’t be worth as much as you thought…
Same for Chrysler’s wack-o Lifetime Powertrain guarantee… life of the car, or life of the car company???
Exactly how the airplanes fell out of the sky on Y2K…they didn’t! It was all Chicken Little!
GM won’t go bankrupt, but they’ll go on one heck of a weight loss program. I doubt if we’ll see that new Camaro any time soon that they’ve been dragging their feet on for so long. As GM tightens the purse strings on already strapped dealers, and they will, you may find it more difficult to get them to back the warranty.
Chrysler may be a much more serious problem.
Just read today in Automotive News that GM wants to sell their world headquarters in Detroit so they can get some cash, and then lease the complex from the buyer. Man! Now that’s getting desperate!
Aftermarket parts will always be available, and burning customers over warranty issues would be a very unsound long term business plan.
But then again anyone still running windows me? (and microsoft survives)
Sure the parts are good but after 8 years we have no support, no fixes, no recommended improvements. and you are basically out of luck.
Cars are better than computers.
Strap in tight, our economy has not yet hit bottom, and it is going to take more than 4 years to fix it.
Chrysler, Ford, and GM are all in big trouble. You should hope that they don’t request bankruptcy protection. If they do, they very well might be bought from the court with the stipulation that only assets are transferred, not liabilities. The single greatest liability would be retirement benefits. All retirees will receive benefits, rest assured. You will pay for them as you do for railroad beneficiaries and steel mill retirees. I’ll get $196/month for the 12 years I spent there, and all good taxpayers will foot the bill. Our fondest hope should be that these auto companies will be able to weather the next few years and continue to pay retirement benefits until they, um, expire.
GM stock prices are very low indeed. Time to buy buy buy! Seriously, if you have the cash on hand now is the time to scoop up tons of GM and other devalued stocks. GM isn’t going anywhere. The fact is that GM is only losing money in the North American market, GM is a global company, very global. GM’s manufacturing capacity is something that is not going to be abandon, ever, it is worth far to much. Take advantage of the situation and buy loads of GM stock today.
It’s like you pulled the plug in the bottom of the sink and then stand there watching the last of the water circling around drain…Before you can add more water, you gotta get the plug back in the drain…Offering $8000 discounts and zero% financing on Hummers is not the answer.
Not wanting to be dragged down with them, suppliers will start demanding CASH up front before they ship parts. If (when) GM goes, all three companies will fold within a week. Shedding it’s health care and pension liabilities during bankruptcy, Chevrolet and Cadillac and Saturn will remain while everything else will be swept away. The carnage will result in 2 million lost jobs but many will find work with other companies who will quickly absorb GM’s newer plants and equipment and build vehicles people are willing to buy built by people who’s standard of living will be somewhat lower than the old UAW GM hands…
Or you could just impose a $6000 duty on ALL automobiles imported into the United States and The Big Three’s stock would recover OVERNIGHT as they could then build small cars profitably…I don’t hear anyone talking about THAT solution but it should be considered. Instead of spending $Billions$ of dollars in a futile attempt to save our auto industry, we could save them overnight and start COLLECTING $Billion$ of dollars in tariffs, making foreigners PAY for the privilege of having access to our markets. Free Trade is GREAT if your labor force doesn’t mind working for $1/day…
For every job at GM, 12 more are generated from it. That’s why its important to keep them going.
The same thing was happening to the economy as the Ford administration came to an end. We lived through it somehow. The economic stimulus package was only a hundred dollars and then two hundred. Maybe fifty and then a hundred but people with low incomes got it too. The deficit was about two billion dollars then. Obama makes much better speeches than Carter did. Three words and a pause for complete silence. My Mom hated his stupid speeches. It’s not all bad, but in the old days, your savings would earn five and a quarter percent. Now, the only option seems to be…what was the only option again? It used to be oil futures.
Time To Buy More Big 3 Stock At Bargain Prices And Their Cars, Too !
America, what a country!
The problem is not that imports are too inexpensive…the problem is that GM, Ford and Chryco have all been badly mismanaged. And still are. Artificially supporting poorly managed companies is not, IMHO, the intended function of our government, and not the purpose of taxation. Tariffs are not the solution.
Besides, Toyota, Honda, and others are now designing and maufacturing successfully in the U.S. using U.S. labor. The “big three” are trying to compete by manufacturing in foreign countries using foreign labor (Mexico and Canada are biggies) and even by badging cheapo foreign makes. So should we artificially support the “big three” with our taxes? I think not. Let the marketplace decide.
And if the GM customers can’t buy that GM that was built in Canada perhaps they’ll buy a Toyota built in the U.S. After all, they’ll still need a car!
Artificial support is only us fooling ourselves.
I think what is happening in the auto industry today parallels what happened 50 years ago in the 1957 through 1960 era. This nation was in what is now called the “Eisenhower recession”. The big cars that GM, Ford and Chrysler had on the market weren’t selling. Ford brought out the Edsel at exactly the wrong time. However, American Motors Rambler sold very well. AMC even revived some old dies and reintroduced a shorter wheelbase model that was called the “American”. Studebaker cleverly shortened its models while retaining the same body shell introduced years earlier and called its new model the Lark. The stock prices for AMC and Studebaker skyrocketed. Sales of the Volkswagen Beetle and other imports took off. Ultimately, GM, Ford, and Chrysler introduced compact cars–the Corvair, Valiant, Falcon, Comet, etc. and the big three recovered. It didn’t take long for many people to abandoned the compacts and begin buying larger cars again.
Today, these companies have produced SUVs and luxury pick-up trucks, but almost abandoned the small cars. I’m certain that the big three will begin producing small, more fuel efficient cars, possibly hybrids, and the recovery will begin. Then, many of the buyers will want bigger vehicles and the cycle will start all over.