Go Back   Team-BHP > BHP Worldwide > The International Automotive Scene


Reply
 
Thread Tools Search this Thread
Old 9th November 2008, 16:54   #1
Senior - BHPian
 
Join Date: Feb 2004
Location: Mumbai
Posts: 3,717
Thanked: 425 Times
Default GM is months away from bankruptcy. EDIT : Files for Chapter 11

The articles from reputed news magazines speak for themselves.

Quote:
With just $16.2bn left in the bank, and about $12bn of that needed as a cushion to fund its day-to-day operations, a day of reckoning is now within sight.
Quote:
GM didn't attempt to hide that fact. "Even if GM implements the planned operating actions that are substantially within its control, its estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business," it said.
Source: The Independant.

Quote:
'I Didn't Think This Day Would Ever Come.' GM Workers Live In Fear As Company Hints It Could Go Broke
Quote:
"General Motors warns it could run out of money by next year."
Source: CityNews, Canada.

Quote:
General Motors warned Friday that it may run out of money by the end of the year
Quote:
GM has said it could fall short of cash needed to operate in the first few months of next year, and Ford has said it has about seven months of money
Quote:
If GM files for bankruptcy, there is "a very high risk" that it would pull in Ford and Chrysler, too, because GM probably would be forced to discount vehicles deeply to generate cash for creditors, and other automakers would be forced to follow.
Source: Insidebayarea website.

Last edited by amit : 9th November 2008 at 16:59.
amit is offline   Reply With Quote
Old 9th November 2008, 17:01   #2
Senior - BHPian
 
ported_head's Avatar
 
Join Date: Mar 2004
Location: Mumbai, India
Posts: 2,391
Thanked: 8 Times
Default

Atleast it's not enough of a deterrent to the Camaro launch. An automotive bailout package is anyway on the cards.
ported_head is offline   Reply With Quote
Old 9th November 2008, 17:11   #3
Senior - BHPian
 
Join Date: Feb 2004
Location: Mumbai
Posts: 3,717
Thanked: 425 Times
Default

A CNN report on October 15 says GM may actually be better of bankrupt.

CNN.

@ported_head: I agree. But given it's current way of operating it's business, I think, any amount of aid package would be akin to dumping cash into a bottomless pit. Even the latest ACI reports that GM, India's expansion plans maybe put on hold because the American HQ has to no money to fund such plans now.

It's sad. Specially now when they seem to have some exciting cars in their new line up like the Camaro and Cruze.

Having said that, the Camaro, no matter how good it is, will not save them from going broke. What they need is volume cars that will sell in huge numbers and not another gas guzzling muscle car. Sure, the Camaro will do wonders for the companies image but what good is image if you don't have cash in the bank?

Another article that says that the Volt and Cruze are 'special cars' for GM and their launch will not be delayed no matter what the crisis.

Quote:
the Cruze, along with the Volt, has been given a special "protected" status by GM. No matter crisis materializes, GM says, the Cruze will arrive on schedule.
About the Camaro:

Quote:
It might seem odd to re-launch a muscle car in the age of high gas prices, but GM is playing up the Camaro's fuel economy. Its 26 mile-per-gallon will offer the same horsepower as the current-generation Ford Mustang's 22 mpg V8.
Source: GM's new product line up.

Last edited by amit : 9th November 2008 at 17:15.
amit is offline   Reply With Quote
Old 9th November 2008, 17:19   #4
Senior - BHPian
 
ported_head's Avatar
 
Join Date: Mar 2004
Location: Mumbai, India
Posts: 2,391
Thanked: 8 Times
Default

Amit, I was being sarcastic. It's quite surprising, that while it is obvious that volume based, fuel efficient vehicles are probably the only foreseeable refuge for these bankrupting companies, they still choose to go ahead and launch a 2 door sports coupe with a 6L V8.

The government still sees hope in financial institutions responsible for a trillion dollar loss, with another bailout package in the works too. They will in all probability fund these companies for as long as they need to, too.
ported_head is offline   Reply With Quote
Old 9th November 2008, 17:21   #5
BHPian
 
HotChillyPepper's Avatar
 
Join Date: Jan 2006
Location: Bang_a_lore
Posts: 605
Thanked: 215 Times
Default

I think most of the companies are in the same situation, but they are not making it public due to many reasons. Most of us really dont know the seriousness of the issue till now. Inidan IT industry gonna take a huge hit by next year Q1. Currently Inidan Compaines are doing the projects signed off before and continue to generate income. But there is no new projects coming in. I feel companies will be forced to lay off by Q1 2009.


What would be the future?

Last edited by HotChillyPepper : 9th November 2008 at 17:22.
HotChillyPepper is offline   Reply With Quote
Old 9th November 2008, 17:25   #6
Senior - BHPian
 
deepclutch's Avatar
 
Join Date: Oct 2008
Location: Muvattupuzha
Posts: 1,120
Thanked: 109 Times
Default

oh! shocking surprises :( .
deepclutch is offline   Reply With Quote
Old 9th November 2008, 17:28   #7
BHPian
 
sabret00the's Avatar
 
Join Date: Mar 2006
Location: Halifax, Canada
Posts: 686
Thanked: 43 Times
Default

Just read the CNN report. It is so hard to believe that all this is happening so fast and industrial Americas along with the rest of the worlds financial health is changing so fast. There used to be a time why I was a child people would get so excited to see a "Made in USA" tag behind watches and other things. Made in America was like the best and most authentic in industrial products. What has the world come to now. So hard to believe that these big daddies of the Automobile world are now struggling for a breath of fresh air.
sabret00the is offline   Reply With Quote
Old 9th November 2008, 18:53   #8
Senior - BHPian
 
aaggoswami's Avatar
 
Join Date: May 2007
Location: Vadodara
Posts: 4,675
Thanked: 1,427 Times
Default

I think right now they have some good products on hand.
Volt is controversial as it was almost/is given freedom from taxation or some subsidy or something like that, though I am not sure what it was and Toyota opposed it.

The new Daewoo Lacetti i.e. new Optra i.e. new Nubira has made it to Korean market. Just launched with 1.6 114bhp motor.
Link: Chevy Cruze Based Daewoo Lacetti Launches in Korea - worldcarfans
So these two cars have sufficient strength to avoid bankruptcy.
Moreover the Camro just made it and if the success of retro sytled Mustang is anything to go by, then Camro will sell well.

This is very close, but now GM has sufficient weapons on hand to fight.
aaggoswami is offline   Reply With Quote
Old 9th November 2008, 19:03   #9
BHPian
 
Join Date: May 2008
Location: Bangalore
Posts: 388
Thanked: 3 Times
Default

People are talking about a US govt bail out for the big three consisting of Ford,GM & Chrysler - all 3 companies have jointly approached the govt - but it remains to be seen whether the new govt will oblige. The problem is where to stop, then?
But having said that, these are iconic names and some of the greatest symbols of American Capitalism.
It would be a very sad if these companies shut shop -I, for one, sincerely hope that things turn out alrite for them.

Last edited by sridharps : 9th November 2008 at 19:20.
sridharps is offline   Reply With Quote
Old 9th November 2008, 19:09   #10
Senior - BHPian
 
Join Date: Dec 2007
Location: Dubai
Posts: 3,860
Thanked: 128 Times
Default

So, is this going the Daewoo way?

Hope to God it's not!
HappyWheels is online now   Reply With Quote
Old 9th November 2008, 20:08   #11
Distinguished - BHPian
 
Mpower's Avatar
 
Join Date: Mar 2005
Location: Bangalore
Posts: 10,432
Thanked: 1,682 Times
Default

This is based on the assumption that car sales will not pickup. If it does, then it should not be a problem.

Moreover, the US government will not let GM or Ford go down. Its as simple as that.
Mpower is offline   Reply With Quote
Old 9th November 2008, 20:31   #12
Senior - BHPian
 
AMATMO's Avatar
 
Join Date: Jul 2007
Location: Bangalore\GOA
Posts: 1,456
Thanked: 2 Times
Default

volumes dont mean anything if they dont generate profits,i think they should sell some products to other manufacturers and see if they can can profits even if it costs them their rank in terms of number of cars sold and go the european way they sould focus on improving their brand image

the primary issue for any company is profits then comes the question of market share

even honda firsts focused on its global favorites like civic,accord etc etc and many others and now the\at it has spare money its experimenting in different segments and slowly growing
cause selling more variety of models actually also becomes a big burden
AMATMO is offline   Reply With Quote
Old 9th November 2008, 23:52   #13
BHPian
 
nemo's Avatar
 
Join Date: May 2007
Location: Bangalore
Posts: 167
Thanked: 9 Times
Default

Ford too reported huge losses -- some 4bn or something -- this quarter. Both the companies have been talking about restructuring and turnaround for the last couple of years and nothing much has happened yet. I sincerely wish these companies somehow sail through the troubled times.
nemo is offline   Reply With Quote
Old 10th November 2008, 01:13   #14
BHPian
 
Join Date: Oct 2004
Location: Mumbai
Posts: 175
Thanked: 17 Times
Default

BTW, does any one know what is the condition in the current turmoil of FIAT Int which almost went bankrupt a few years ago?
psp62in is offline   Reply With Quote
Old 10th November 2008, 01:15   #15
Team-BHP Support
 
theMAG's Avatar
 
Join Date: May 2006
Location: Long Island, NY
Posts: 7,038
Thanked: 1,476 Times
Default

Quote:
Originally Posted by Mpower View Post
This is based on the assumption that car sales will not pickup. If it does, then it should not be a problem.

Moreover, the US government will not let GM or Ford go down. Its as simple as that.

Mp,

I guess this will work both ways- even if car sales pickup, that'd only be buying GM some time since some of the reports I've been reading claim that US car sales are currently at a 25-year low. GM needs a significant bump up in sales just to return to shaky financial ground from its current no-financial ground. The other scenario is even worse - if car sales continue to drop, they'd be bankrupt well before the estimates.

You're completely right about the US government propping up GM/Ford when it comes to that. The last thing a new American president wants is to have 2 American institutions go bust first thing when he takes power.

Last edited by theMAG : 10th November 2008 at 01:16.
theMAG is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Nortel files for bankruptcy! Edit: Now Avaya HappyWheels Gadgets, Computers & Software 6 23rd January 2017 09:13
Fisker Auto files for bankruptcy karan561 The International Automotive Scene 0 24th November 2013 21:28
Auto Capital of the World - Detroit files for bankruptcy Gandhi The International Automotive Scene 4 24th August 2013 12:27
Chrylser files for Bankruptcy Protection evo The International Automotive Scene 24 18th August 2011 10:05
Delphi files for Bankruptcy amit The International Automotive Scene 2 12th October 2005 15:25


All times are GMT +5.5. The time now is 19:21.

Copyright 2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks