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DanS
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Kickball Capital of the World
Jan 1970
time: 00:24
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You heard it first here. It looks to me like it is.
The company's $300 billion in debt is about to be cut to junk status by the ratings agencies, dramatically raising its cost of money. The market seems to be pricing in something like a bankruptcy, since the market capitalization for the entire company is only $15 billion.
But more importantly, GM's lineup of cars are shitty. I rented a Chevy Malibu over Christmas and it felt like I was getting into a brand new $20,000 piece of trash. Maybe these are very reliable pieces of trash, but there you are.
Does anybody have any countervailing evidence?
When the **** hits the fan, this one's going to be really ugly in the business and political worlds.
Last edited by DanS on 22-04-2005 at 07:06
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VetLegion
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Market capitalization is value of stock, right? Are total assets of the company larger? I assume they are. How is $300 billio of debt compared with that?
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Oerdin
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of Internet Music.
Sep 2001
time: 21:24
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The main reason GM's debt got down graded was the unexpected $2 billion it had to pay to FIAT and the highest in industry incentives it has to give to sell its cars. I'm afriad its corporate culture prevents worthless executives from being forced out so even though Wagner has been a bean pusher more then a hard nosed exec he still sits on the top spot with no fear of being forced out.
Combining with the lack of accountability and massive red tape is the fact that for decades GM has been run by accountants. They're good at balancing accounts and squeezing the last penny out of suppliers but they don't know jack about the business of making a good car. That's why GM tends to have the worst interiors and why its engines are usually using older technology instead of the latest. The accountants have decided it is better to spend $2000 less in specifications in a car which will then need $2000 of incentives to sell then to just spend the $2000 up front to build a car which doesn't need incentives. The editor of Car and Driver Magazine, who worked for GM for 25 years said that GM's management is so diluted that even if designers and enginers came up with the theortically perfect car it would never get built because so many people who know so little about cars or the industry have the power to demand changes be made.
Last edited by Oerdin on 22-04-2005 at 07:57
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Richelieu
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Gatineau
Dec 2001
time: 00:24
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And they just refuse to learn don't they? They'll keep on building ****ty cars until the bitter end... what a waste.
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Geronimo
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st cloud USA
Jan 1970
time: 05:24
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Has Saturn been their only successful brand lately?
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mrmitchell
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Where are the major American companies that don't have a reputation for evilness or billions in debt?
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22-04-2005 06:56
I also meant that the wife is happy, so I'm happy. Happily toeing the party line, yea.
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