MONEY CULTURE

Why GM May Go Bankrupt

To some of its investors, it's worth more dead than alive.

By Daniel Gross |
May 12, 2009 | Updated: 3:41  p.m. ET May 12, 2009

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  • Posted By: tired and old @ 05/14/2009 11:20:08 AM

    TRUE STORIES :

    MY DAUGHTER TAKES HERE CHEV IN FOR REPAIRS ON HEAD GASKET, COST HUNDREDS OF DOLLARS.

    SHORT TIME LATER SHE TAKES IT TO ANOTHER DEALERSHIP AND HE REPLACES THE SAME HEADGASKET THAT WAS SUPPOSE TO HAVE BEEN REPLACED AT THE FIRST DEALERSHIP.

    SECOND DEALERSHIP SAID ORIGINAL HEAD GASKET WAS NEVER REPLACED.

    DAUGHTER COMPLAINS TO FIRST DEALERSHIP AND THEY GIVE HER HER CO-PAY BACK.



    STORY NUMBER 2.

    I TOOK MY CHEV TO DEALERSHIP TO REPLACE LEAKING POWER STEERING UNIT PUMP.

    LATER I TAKE IT IN AGAIN FOR SAME PROBLEM.

    WITHIN A WEEK PROBLEM RETURNS AND UNIT AGAIN IS REPLACED.

    SOLD THE CAR AND WARNED NEW OWNER OF THE SITUATION.

    BUY A GM CAR AND YOU INHERIT HIGH COST OF REPAIRS.

    BUY AMERICAN, GET CRAP.

    NOW DRIVE A NISSAN AT ACCEPTIONAL GAS MILEAGE; WITHOUT PROBLEMS.

    WILL NEVER OWN ITALIAN CAR, WILL NEVER BUY FROM GOVERNMENT MOTORS OWNED BY UAW MOB.

    • Posted By: carnival @ 05/29/2009 1:59:17 PM

      sounds like a dealership problem to me

  • Posted By: ex-software engineer @ 05/29/2009 11:24:19 AM

    my chevy cavalier --> transmission blew up after 47,000 miles
    ford mustang --> seat belts in backward and not functional
    chevy camaro --> air conditioner never worked
    Honda Accord --> no problems...ever.
    Lazy Union Autoworkers dont like to work, now they dont have to work ever again.
    Karma and payback, they did it to theirselves.

    • Posted By: carnival @ 05/29/2009 1:57:03 PM

      3 post...all similar, yet different...so it begs the question?? Which was it....your cadillac or you mustang? your camaro or your trans am? Just smells a bit fishy to me.....don't mean to call you out, but i have to call a spade out when I see one....

    • Posted By: carnival @ 05/29/2009 1:57:01 PM

      3 post...all similar, yet different...so it begs the question?? Which was it....your cadillac or you mustang? your camaro or your trans am? Just smells a bit fishy to me.....don't mean to call you out, but i have to call a spade out when I see one....

  • Posted By: ex-software engineer @ 05/29/2009 11:24:01 AM

    my chevy cavalier --> transmission blew up after 47,000 miles
    ford mustang --> seat belts in backward and not functional
    chevy camaro --> air conditioner never worked
    Honda Accord --> no problems...ever.
    Lazy Union Autoworkers dont like to work, now they dont have to work ever again.
    Karma and payback, they did it to theirselves.

  • Posted By: ex-software engineer @ 05/29/2009 11:20:58 AM

    Chevy Cavalier --> transmission blew up 6 days after end of warranty
    Caddilac -->Seat belts put in backwards
    Pontiac Trans Am --> Air conditioner never worked
    My 10 year old Honda Accord --> no problems...ever.
    Lazy American Union workers dont like to work, now they have an opportunity to never work again!!!
    Dug their own grave, no pitty, KARMA, what comes around.

  • Posted By: HillBillyBill @ 05/22/2009 3:03:12 PM

    There is no better reason for GM and Chrysler to go bankrupt than being run by a bankrupt government. GM was required to layoff thousands of workers in order to qualify for Congress's TARP loan money that was authorized for the purpose of saving and creating jobs. DUH! Now, the task force is requiring both to close many dealerships to make the companies more profitable. ANOTHER DUH! Dealers pay a franchise fee for the privilege of buying vehicles from the manufacturers and then selling them to the public. Eealers are the onlh way automakers have of making any money at all.

  • Posted By: Vigilance @ 05/12/2009 5:19:26 PM

    This is bad. Detroit's already at 25% unemployment. If GM goes under, we'll see levels unmatched even DURING the Great Depression. Crime, abandoned properties by the city block, and massive human suffering. But it's not clear what can be done about it.

    • Posted By: jimbo3800 @ 05/12/2009 9:13:07 PM

      Have you ever been to Detroit? They have crime, abandoned properties, and human suffering even when the economy is strong. Why, you ask? Because Democrats and Unions have run that town for generations, with sadly predictable results.

      • Posted By: Vigilance @ 05/14/2009 4:21:13 PM

        I have no love for the auto unions, but nobody is going to take you seriously until you stop saying "Newsweak".

  • Posted By: Quid Pro Quo @ 05/13/2009 7:56:52 PM

    Bankruptcy may be the best thing for GM. They have asked for billions in bailout money, but the unions have made little or no concessions to help the company recover and become competetive. Japanese automakers have an operating cost of around 45.00 per hour, where GM is at over 80.00 per hour. The Japanese put the money in the car!

    Pretty easy to do the math. And still the unions won't budge.

  • Posted By: newera22 @ 05/12/2009 5:01:45 PM

    Do we have to always be given the Obama storyline? Or can we get a real article? Here is some simple math that readers could have benefited from. Obama plan gives the UAW 39% of a new company for $10 billion. And then asks bondholders to erase $24 billion of debt for 10% of the new company. Stunning really. The only reason it is proposed like that is because Obama wants it to fail. Bondholders made the UAW liabilities possible in the first place. And what about the government giving money. Didn't that help the bond holders? No, the company could have went bankrupt without the government money. Then courts would have decided fairly among the stakeholders. The net effect here is that the government gave GM money only so the government could claim they are the ones that should divide up GM. Long story short. Obama took taxpayer money, gave it to GM, thereby buying influence so that he could propose a plan that will wipeout investors and give the company to the UAW. That is called stealing. It is without question, change. A big change in the way most business has always been done in the U.S.

    • Posted By: jnakhoul @ 05/13/2009 3:48:56 PM

      interesting narrative except it doesnt make any sense why would he inject money if he wanted the company to fail. it was already failing on its own

  • Posted By: GMsucks2009 @ 05/12/2009 9:31:40 PM

    I only purchase Toyota products now. While my Toyota cars are primarily produced in the United States, Toyota engineering is far superior to the junk GM spits out.

    • Posted By: ImportsSuck2009 @ 05/12/2009 10:23:18 PM

      Toyota engineering? Toyota uses many GM parts in there automobiles. The coolong systems for one are GM Dex-Cool systems. Toyota is nothing special, I had an Avalon and didn't care for it. I now own a Buick Lucerne and it has a far superior ride to that of the Avalon and a better quality sound system and interior. The Avalon's sound system was crap and I hated the korny sounding Toyota horn. I'm glad to be back behind the wheel of a good old American sedan with a nice loud obnoxious horn and will never go back.

      • Posted By: GMsucks2009 @ 05/13/2009 1:05:06 AM

        Well we all have our opinions. Every American car I have owned has been in the shop so many times I quit counting. Not one of my Toyota's have been in the shop. I could care less if my Toyota cars have GM parts, but it seems to me that Toyota knows how to put a car together CORRECTLY!

        • Posted By: gdnusgi1 @ 05/13/2009 3:44:40 AM

          That's right, I've noticed these new Toyota dealerships don't even have serviced departments. Nothing ever goes wrong. Unless your one one of the 750,000 tacoma owners who had to have your truck taken off the road and crushed because the frame rusted. Or perhaps you were one of the 3.1 million people involved in the class action lawsuit because your engine oil was turning to sludge. Maybe you had one of the 20,000 Tuhdras whose drive shaft cracked. Yep, Toyotas never have problems, just ask any of the U.S. industry-hating media.

  • Posted By: ColetteDD2 @ 05/13/2009 1:58:35 AM

    Were it not for the thousands and possibly hundreds of thousands of supply chain businesses and thier workers I would be enjoying a really good belly laugh at the prospect of GM's possible and depending on who you ask impending bankruptcy.

    What is truly disturbing to me is that even facing bankruptcy GM is still casting the UAW as the bad guys instead of thier own short sighted, mypoic management.

    This is so a "Good Grief" Charlie Brown moment from the Peanuts. Only more sad than funny and what makes the hurt worse is knownig it was preventable.

    Colette, Denver, CO

    • Posted By: dct9000 @ 05/13/2009 8:48:24 AM

      when do you think this could have been prevented? When GM negotiated large medical coverage to it's employees? Maybe it could have been prevented by national health care obviating the need to cover the cost of it's workers to the tune of nearly 1800.00 per vehicle. Maybe it could have been prevented in the 70s when GM was making huge profits and agreed to major retirement packages that are now part of it's debt. There are thousands of complexities that played into this mess and no "one" thing would have prevented it. Perhaps haveing grown to the largest most lumbering company in the world could have prevented it, but when feasting at the table it's hard to understanding or forcaste when the lean times are going to bite back.

      • Posted By: YOUSOCRAZY @ 05/13/2009 10:54:30 AM

        Wouldn't a national health care program cost them at least as much as the present one< the experts all say that it will? Plus, if it did not cost them as much, wouldn't that just be another form of taxpayer bailout?

        • Posted By: maetrix66 @ 05/13/2009 11:55:25 AM

          I see comments like this all the time on the internet.

          "I bought a GM/Chrysler/Ford vehicle (or 5) 25 years ago, and had a bad experience, so I have sworn them off for life. I am now pledging my patriotism by running this AMERICAN company into the ground because of experiences had almost three decades ago. You are welcome. Now excuse me while I go climb into my Prius. I guess you can thank me for saving the world and the country."

          Please people. I understand the people that are hesitant to buy from a company that is in obvious financial hardship, and I also understand not returning to buy from a company that they have not had good luck with in the past. But if you haven't set foot in a GM dealership in 25 years, don't presume that you have a clue about the current quality of GM vehicles.

          And us "BUY AMERICAN" morons are no more inept than you "BUY FOREIGN" morons. I have owned foreign vehicles in the past, and had similar experiences to yours.

          Do me a favor, continue to be a slave to your own logic. Tthe next time something comes out of your mouth that costs YOU the respect of someone else, just stop talking from then on as well.

          • Posted By: YOUSOCRAZY @ 05/13/2009 1:24:40 PM

            This American corp, as you call it, was one of millions that first screwed themselves and their stockholders by the most idiotic and truely American business plan, before they became one of the leading job importers in this country.
            The product was not what people wanted and they fell for the foolish "buy American" crap which led to the imbicel logic of the of "too big to fail" reward for failure!

            You want that detroit ***, you buy it, and as far as respect, it is worthless from someone that I have none for!

    • Posted By: dct9000 @ 05/13/2009 8:47:48 AM

      when do you think this could have been prevented? When GM negotiated large medical coverage to it's employees? Maybe it could have been prevented by national health care obviating the need to cover the cost of it's workers to the tune of nearly 1800.00 per vehicle. Maybe it could have been prevented in the 70s when GM was making huge profits and agreed to major retirement packages that are now part of it's debt. There are thousands of complexities that played into this mess and no "one" thing would have prevented it. Perhaps haveing grown to the largest most lumbering company in the world could have prevented it, but when feasting at the table it's hard to understanding or forcaste when the lean times are going to bite back.

  • Posted By: vstillwell @ 05/13/2009 1:08:46 PM

    This is ridiculous. Who in the hell put those dumbass Republicans in charge and bought into their dumbass, redneck policies of deregulation and more deregulation? Some damn bondholders are going to rip GM apart so they can get their insurance. I wish my 401K had insurance.

  • Posted By: jbz7879 @ 05/13/2009 11:51:56 AM

    there is no silver lining to a firm like GM going bankrup =its a disaster

  • Posted By: Bella's a Pug @ 05/12/2009 7:13:59 PM

    how can a company as established as GM is, stand and watch foriegn companies like Toyota and honda produce superior vehicles and continue manufacturing inferior ones? did they have a death wish?

    • Posted By: jimbo3800 @ 05/12/2009 9:10:30 PM

      Your argument, as always, is weak. I drive a new GM product (a Corvette), for which Toyota and Honda do not even build a competing product (Toyota tried and failed with the Supra). So please spare us this "all things from Japan are superior" nonsense. A.) it isn't true, and B.) you just want to believe it because it re-enforces your basic Anti-American core beliefs.

      • Posted By: YOUSOCRAZY @ 05/13/2009 10:48:43 AM

        What was un-matched among the many international car companies and gm, chrysler, and ford was a responsibility to the business itself and the stockholder. In the U.S. the general plan for a publicly held corporation is to survive strictly on recievables financing and literally mortgage the corporation to the hilt while milking the lifes blood of capital out in undeserved supposed performance related bonuses and ridiculous base salaries garnished with further undeserved perks! This is the American way, for now.

  • Posted By: WyoDan @ 05/13/2009 10:06:57 AM

    When I was growing up in the 70s and 80s my dad was working his way up in car sales. In the 80s he managed a chain of Oldsmobile dealerships and we got to drive and see many of GM's "best" from about '82 to '90. Inferior, troublesome, heartless products, one after the other. With that memory I really believe that was the do or die era of GM and they chose to die. They cynically burned and wore out far too many loyal customers back then while opening the door for Toyota, Honda, and even Nissan to win loyalty.

    I agree that GM now is finally making world-class quality automobiles that in many ways beat the best of the rest. The new Cadillacs, the Chevy Malibu and Vette, the Pontiac G8, etc. They have (or had) some wonderful products in the pipeline as well which sadly we'll most likely never get to see.

    They're finally doing what they should've done over 20-years ago by making great and competitive cars. It breaks my heart to admit to myself that it's most likely far too late to matter. There's just no time left. It's over.

    Truly heartbreaking.

  • Posted By: olbuzz @ 05/13/2009 3:15:14 AM

    Gm and every other American industry is headed for bankruptcy ..With this consistent belittling by the media of products produced in this country.. It seems its the chick thing to to do to assume that this blatant misinformation is correct. The American auto industry supplied the consumer with what the market responded to until the recent 4.00$ per gallon crisis. The quality between these makes are so small that the average person would not know the difference.... I'm heading proudly to see my child soldier graduate a military level this week.. I received some nice gifts via the United States Army to commemorate the moment. I happen end to notice the wonderful lapel pins of our flag ....Have made in China stamped on the back. I hope to find another manufactured in the country before I depart.. Or sadly I'll have to draw one on my lapel. Everyone that thinks this issue is such a joke will not be laughing soon enough... Just because this issue hasn't touched you .... Your time is coming or your part of the problem.. This country was built with industry and sadly it appears to be its demise!~!!

  • Posted By: Larry751 @ 05/12/2009 9:38:47 PM

    All I can say is that GM Greatly Helped Save the Bacon of the USA in Both World Wars of the 20th Century.. To let her Die or to Force Her to DIe is to say the least Unpatriotic and Any Nation or Corporations that do Anything to seriously Hurt the USA is on the Door Step of Treason Against (We The People).of These United States of America.

  • Posted By: Larry751 @ 05/12/2009 9:37:07 PM

    All I can say is that GM Greatly Helped Save the Bacon of the USA in Both World Wars of the 20th Century.. To let her Die or to Force Her to DIe is to say the least Unpatriotic and Any Nation or Corporations that do Anything to seriously Hurt the USA is on the Door Step of Treason Against (We The People).of These United States of America.

  • Posted By: newera22 @ 05/12/2009 5:02:18 PM

    Do we have to always be given the Obama storyline? Or can we get a real article? Here is some simple math that readers could have benefited from. Obama plan gives the UAW 39% of a new company for $10 billion. And then asks bondholders to erase $24 billion of debt for 10% of the new company. Stunning really. The only reason it is proposed like that is because Obama wants it to fail. Bondholders made the UAW liabilities possible in the first place. And what about the government giving money. Didn't that help the bond holders? No, the company could have went bankrupt without the government money. Then courts would have decided fairly among the stakeholders. The net effect here is that the government gave GM money only so the government could claim they are the ones that should divide up GM. Long story short. Obama took taxpayer money, gave it to GM, thereby buying influence so that he could propose a plan that will wipeout investors and give the company to the UAW. That is called stealing. It is without question, change. A big change in the way most business has always been done in the U.S.

    • Posted By: jimbo3800 @ 05/12/2009 9:14:55 PM

      Excellent post. Sadly, all you will ever get here at Newsweak is the story exactly as Obama wants it told, without a single word changed.

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