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GM Loses Another $16 Billion -- Bankrupt?

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  • Originally posted by Vanguard
    They have $20 billion in cash and enough free cash flow to borrow another $50 billion.
    What's GM's free cash flow?

    Perhaps you're talking about the $1 billion in cash they're blowing through each month?
    I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

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    • Cash flow in North America is negative. But on the other hand, in Europe people are paying Euros to get cars designed and built largely with dollars. Over there, cars must be, uh, pretty profitable.

      But I have already said that a GM bankruptcy cannot be ruled out, especially for GM-NA. I just think that it is very far from certain. And if it is done, it will be done more for tactical reasons than any lack of "wealth creation".
      VANGUARD

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      • Originally posted by Sandman
        I bet the Warsaw Pact accounted for a fair chunk of world car production when it imploded.
        Yeah... at some point some foreign guy advised us to just pay the workers to do nothing, save the electricity and stop ruining raw materials by making stuff out of them .
        "The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists."
        -Joan Robinson

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        • Originally posted by Vanguard


          They have $20 billion in cash and enough free cash flow to borrow another $50 billion. Even in a terrible auto market, they are only losing a small amount on operations. Their overseas sales are rising and they are finally producing decent cars.

          This is not Enron. They don't implode due to accounting loses. GM sell 9 million units of product a year at $20,000 a unit--- and that's actual money coming in, not leveraged accounting tricks.
          Not to mention they're making money in every market except North America (Europe, Latin America, Asia, and even Africa are all posting profits). There big problem in North America is 1) they're making to many gas guzzlers in a market which wants fuel sippers 2) They have to keep paying workers even after they've laid them off so you have lots of money going out and nothing come in on several lines.

          Change those two things and GM is actually profitable in every market. Once again DanS can't see the forest for the trees.
          Try http://wordforge.net/index.php for discussion and debate.

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          • Originally posted by Vanguard
            Cash flow in North America is negative.
            Oh, boy, is it negative...
            I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

            Comment


            • Originally posted by Vanguard


              They have $20 billion in cash
              They also owe $30 billion in payables...
              DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.

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              • Originally posted by chegitz guevara


                Apparently Oerdin feels that American autoworkers should only be making $8 - $12 an hour so the can be competitive.
                Well, the another reason why Toyota's so competitive is that many of the Japanese automakers have a higher level of automation in their assembly line... which requires fewer employees.
                B♭3

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                • Washington to the rescue!

                  US Automakers Are Seeking $25 Billion in Federal Loans

                  The Big 3 Detroit-based automakers are seeking about $25 billion in federal loans as they struggle to ride out a steep downturn in U.S. auto sales, The Wall Street Journal reported on Friday.

                  The Big Three
                  Lobbyists for the U.S. automakers—General Motors, Ford Motor and Chrysler—briefed White House officials, as well as U.S. Rep. John Dingell and other Michigan Democrats, on a possible bailout and plan to unveil the proposal after Labor Day, according to the report.

                  The plan is for the government to lend some $25 billion to the automakers in the first year at an interest rate of 4.5 percent, or about one-third what the companies are currently paying to borrow, the report said.

                  Under the proposal, the government would have the option of deferring any payment at all for up to five years, the article said.

                  Representatives at GM, Ford and Chrysler were not immediately available for comment.

                  In a letter to U.S. Senate Majority Leader Harry Reid and House of Representatives Speaker Nancy Pelosi, Michigan congressmen sought up to $25 billion in low-interest credit for U.S. automakers and parts suppliers from the federal government.

                  "This incentive program will make it more economically feasible for U.S. auto manufacturers and part suppliers to retool their facilities by providing low-interest credit," said the letter, dated Aug. 1.

                  "The federal government must be a strong partner in the investment in the advanced technologies," the letter said.

                  GM Chief Executive Rick Wagoner said on Thursday that the top U.S. automaker was seeking federal loan guarantees for itself and its suppliers.

                  He declined to say how much the company was looking to borrow under such a program if it were approved by the government.

                  The embattled automakers are closing truck plants and laying off thousands of workers in response to changing consumer tastes and to conserve cash at a time when U.S. vehicle sales are hovering at decade lows. At the same time, the companies are ramping up investment in more fuel-efficient small cars, hybrids and electric vehicles in response to record gas prices.

                  The Detroit Free Press reported earlier this month that executives at GM, Ford [F Loading... () ] and Chrysler met and agreed that they would need about $40 billion to ride out their current troubles, and the way out of the losing streak would be a government bailout.
                  Copyright 2008 Reuters.
                  Try http://wordforge.net/index.php for discussion and debate.

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                  • Heh. All about the free market until they fail. Then it's "help me Uncle Sammy!"

                    **** you. Die.

                    -Arrian
                    grog want tank...Grog Want Tank... GROG WANT TANK!

                    The trick isn't to break some eggs to make an omelette, it's convincing the eggs to break themselves in order to aspire to omelettehood.

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                    • Comment


                      • Originally posted by Arrian
                        **** you. Die.
                        I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891

                        Comment


                        • I don't want them to die, they're to important to die, but the government needs to get something out of this. I'd support a capital infusion in exchange for government ownership. That way the bastards can conclusively be dealt with, reorganized, and then reprivatized. The last thing the US needs is to copy Thatcher's economic disaster.
                          Try http://wordforge.net/index.php for discussion and debate.

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                          • The problem, Oerdin, is that they're already corpses. You can pump as much blood into their veins as you wish, and the corpse will not come back to life. They're dead, man.

                            -Arrian
                            grog want tank...Grog Want Tank... GROG WANT TANK!

                            The trick isn't to break some eggs to make an omelette, it's convincing the eggs to break themselves in order to aspire to omelettehood.

                            Comment


                            • The French model works much, much better in the long run then Thatcher's "**** it let's kill it all" model. Thatcher single handedly destroyed the second largest auto industry on Earth and with it destroyed most of Britain's heavy industry. To compare the French model merged and reorganized companies under government ownership then once they were profitable reprivatized them. The French companies are still around, are profitable, and employ tens if not hundreds of thousands of people plus insuring France has the heavy industry needed for future wars or national needs.

                              The problem with the US is it does neither the Thatcher or French model, it just keeps giving interest free loans to enable bad management to continue being bad management.
                              Try http://wordforge.net/index.php for discussion and debate.

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                              • Originally posted by Arrian
                                The problem, Oerdin, is that they're already corpses. You can pump as much blood into their veins as you wish, and the corpse will not come back to life. They're dead, man.

                                -Arrian
                                Not even close. People buy millions of cars and it is just a matter of nullifying union contracts, firing management, and producing cars which are worth a crap. The reality is all three of them make huge profits outside of the US and Canada and it is only the US and Canada (where the unions and bad product choices are weighting down on them like bricks) where they are losing money.

                                Calling vital industries dead is nothing less then typical short sighted American stupidity. France successfully took an unprofitable car sector and turned it into a very profitable national asset. Germany also protected it's automotive sector as does Japan via managed competition. Japan, due to constant government regulation and intervention, manages to get a third of it's exports from the automotive sector. We're not seeing the free market work here but instead see the result of constant government intervention by governments around the world.
                                Try http://wordforge.net/index.php for discussion and debate.

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