The General Motors bankruptcy proceedings are wrapping up today and the judge is expected to let this one sail through much like Chyrsler's reorganization. GM will be split into an "old" company saddled with all the problems, and a "new" GM that will emerge with few brands and none of the legacy issues that have plagued the company for decades.
Sounds great right? Well, maybe not. Bill Visnic of AutoObserver breaks down what's left of the "good" GM and doesn't find much to get excited about. Although Chevrolet looks like it can become a strong brand, Buick and GMC are big question marks. Even Cadillac has a tough road ahead gives its limited lineup and dependence on large cars and SUVs. Kind of makes you wonder if this whole government sponsored bankruptcy thing is really doing us any favors.
AutoObserver: "Good" GM: Maybe Not All That Good
stovt001 says:
03:52 PM, 06/30/09
There is little doubt Caddy can be a strong brand, and every other mainstream brand has its luxury counterpart. The key is for GM to actually go ahead with Alpha and the STS replacement.
Now GMC is being kept alive and Buick remains in the US solely because of politically powerful dealers.
Bill's analysis is lacking. There is no comparison to Chevrolet or any other brand/manufacturer for that matter. The analysis basically reads "GMC, Buick, and Cadillac are weak brands because sales crashed in the past years". Well yeah, so did everyone else. Bill has never had anything good to say about GM, and this sounds like little more than another attempt to spread some more negative views of GM to the public in order to foul up the GM's emergence from bankruptcy.
estreka says:
05:48 PM, 06/30/09
I really feel for the shareholders that bought at $35 a year ago and now own "bad GM." At least, I'm assuming they're retaining the old.
I completely agree about GMC and Buick, at least as American counterparts. Buick as we all know does well in China....for now.
cwc1 says:
05:57 PM, 06/30/09
I agree with you stovt001; I think that Bill Visnic's assessment is clouded by his negative perceptions and bias against GM (and probably the other domestic automakers as well).
GM is in a position in which they have to be twice as good just to be competitive, in order to make up for past mistakes, and some factors that were beyond their control.
rsholland says:
06:56 PM, 06/30/09
Ummm... not so sure about the criticism directed at Bill. He's merely taken data that was compiled by Edmunds, and reporting it.
bbechtel16 says:
05:46 AM, 07/ 1/09
Yeah, what is going on with the stock? Glad I didn't try to buy low?
estreka says:
08:34 AM, 07/ 1/09
Usually when a company goes bankrupt, the stock essentially becomes a "pass" for purchasing stock in the new company.
So say you have 4,000 shares of GM at the current price of $1.02. You can either cash out and collect your $4,080 or you can forfeit it and buy the new stock at some arbitrary price that you can hope will increase. Basically, you can buy shares before they hit the market. Delphi did this a couple years ago, offering folks with 2 cent shares the option to buy new $67 shares (which immediately became worthless...again).
This is speculation of course. I'm not sure how GM is going to treat shareholders. They might just keep the same ticker and the stock might go back up. If that's the case, it's one helluva steal at $1.02.
stovt001 says:
05:10 PM, 07/ 1/09
"Ummm... not so sure about the criticism directed at Bill. He's merely taken data that was compiled by Edmunds, and reporting it."
The data is there, but the context isn't. Showing declining sales in a year where Toyota has taken a staggering loss and is experiencing plummeting sales as well doesn't necessarily mean the brand itself is worthless. As I said before, comparing those numbers with Chevy and the rest of the market would be telling. The relevant data that is excluded in this study is cause for suspicion. Remember, you can make figures say absolutely anything you want them to, depending on what you include and exclude.