GM admitting possiblity of failure

omej · Mar 5, 2009

Today, even GM finally admitted that they may still fail.

http://money.cnn.com/2009/03/05/news/companies/GM_10K/index.htm

This is what people like me have been saying all along. A failure of GM now would be even more unbearable, considering it's AFTER we spent billions of dollars trying to keep it up. When/if this happens, the Democrats are done for.

Mr.Conservative · Mar 5, 2009

Every conservative and their mother knew this wouldn't work. The fall is going to be all the harder after we tried foolishly to save a sinking ship.

The Parakeet · Mar 6, 2009

Well, I think their main objective was to keep it alive long enough to prevent a massive failure. As it is, it will probably just go over to the corner and fail.

The numbers were very bad when they were considering the extra money that GM wanted. It was basically that we could loan them $25 million, or they could cause $100 million worth of damage to the credit market and the banks if they went under.

pingpong12 · Mar 6, 2009

Where did all of that money go then? Where is the oversight? I really hope there is accountability for what they did.

The Parakeet · Mar 6, 2009

It's buried in a report somewhere I'm sure. I'll keep an eye on the Wall Street Journal for now.

BrightMind · Mar 16, 2009

I'm glad that they've finally realized that an economic bailout for their company won't help their business. If you've got no consumer spending, then no matter how much money the government pumps into your business, you're going to fail. People just aren't spending their money...eliminate that problem and they might stand a chance.

curious · Mar 18, 2009

An article in the New York Times referred to something like a controlled bankruptcy. I agree that the real goal wasn't to save GM but to keep it stumbling along, shrinking it over time so the damage wouldn't be like a tidal wave. It's always been one of the worst-run companies on earth.

However, we probably have to keep some sort of truck/car industry alive. Not having one at all would be something of a security risk, I think. I think there are some industries where we need a minimal presence just so we have a basis if we ever need to expand. People who know how to make cars, a few steel mills, some sort of electronic manufacturing base.

Glee · Mar 18, 2009

This really hurts. Let ask for our money back.

myp · Mar 21, 2009

curious said:
An article in the New York Times referred to something like a controlled bankruptcy. I agree that the real goal wasn't to save GM but to keep it stumbling along, shrinking it over time so the damage wouldn't be like a tidal wave. It's always been one of the worst-run companies on earth.

However, we probably have to keep some sort of truck/car industry alive. Not having one at all would be something of a security risk, I think. I think there are some industries where we need a minimal presence just so we have a basis if we ever need to expand. People who know how to make cars, a few steel mills, some sort of electronic manufacturing base.

Shrinking it and letting it fail really is no different. You are still losing the same number of jobs and the same number of economic output.

The other thing is that, letting the big three fail would have meant Toyota, Hyundai, Honda, etc. would have just taken their market share. All three of these companies, as well as many other foreign automakers, have plants in the United States and as their market share went up, they would hire more Americans. Simple as that. There was no need to bail out the big three.

Glee said:
This really hurts. Let ask for our money back.

If only we could...

Sparks · Mar 21, 2009

Yeah, sort of a sad but well deserved end to an outfit that once said, "What is good for GM is good for country." Or so GM President Charles Wilson said over 50 years ago. But it is time for them to go. I wouldn't spend any more money on them. I see they are trying to hold the Europeans up using the same "woe is us, woe is you" job loss scenario. I bet they don't get much sympathy there either.

deanhills · Mar 22, 2009

Sparks said:
Yeah, sort of a sad but well deserved end to an outfit that once said, "What is good for GM is good for country." Or so GM President Charles Wilson said over 50 years ago. But it is time for them to go. I wouldn't spend any more money on them. I see they are trying to hold the Europeans up using the same "woe is us, woe is you" job loss scenario. I bet they don't get much sympathy there either.

I'm confused. How is it possible for Citibank to show a profit, and GM going under? I just have this feeling that Banks have many more options to hide all their sins, hence their problem in the first place, and hence a danger too, as wonder how they are going to play with numbers once the bail-out money starts "pouring" in

The Parakeet · Mar 22, 2009

I'm pretty sure accountants were digging through Citibank's books hard. This was big news, so every investor worth his salt was double checking it.

They've just been able to start making a modest profit and pull themselves out of the slump.

deanhills · Mar 23, 2009

The Parakeet said:
They've just been able to start making a modest profit and pull themselves out of the slump.

I don't understand how. All of the banks are in the same dilemma real-estate loan/recession wise. If Citibank is pulling itself out of its problems, then all the other Banks have to be doing the same, and there should not be a need for a bail-out package.

Did Citibank do this so that they could improve their share price

curious · Mar 24, 2009

But is Citigroup profitable because of the bailout money it took last quarter? I don't get it once again. If they aren't in that much trouble, sholdn't we be getting some of that money back?

And if the Asian companies pick up the market share, most of those jobs could go to Japan and Korea. I don't think Hyundai makes cars in the US at all.

deanhills · Mar 24, 2009

curious said:
But is Citigroup profitable because of the bailout money it took last quarter? I don't get it once again. If they aren't in that much trouble, sholdn't we be getting some of that money back?

And if the Asian companies pick up the market share, most of those jobs could go to Japan and Korea. I don't think Hyundai makes cars in the US at all.

Exactly! Would like some insights for this. As it is really confusing me.

The Parakeet · Mar 24, 2009

I don't believe that Citigroup was in as deep. A lot of banks have even turned down the money or returned it at this point, so the financial sector is starting to get its legs back.

I'm sure that the bailout money didn't count as anything. It's is probably just balanced debt on the books. The stock price tripled on the news, and I would hope that investors wouldn't be that stupid.

The bond market is getting better and the toxic assets have about bled as much as they probably will. The well run banks are starting to recover.

curious · Mar 25, 2009

I'm so cynical at this point that I'd believe a bunch of executives got together and figured out that if they can keep a bank going for just a little longer, they can pay themselves big bonuses and let it go under later.

deanhills · Mar 25, 2009

curious said:
I'm so cynical at this point that I'd believe a bunch of executives got together and figured out that if they can keep a bank going for just a little longer, they can pay themselves big bonuses and let it go under later.

Me too! I would not be surprised if industry got together and decided this is how they are going to fix the stock prices, anything is possible! If what Parakeet is saying is true, why was 1.2 trillion dollars bail-out needed in the first place, and why are we not hearing anyone saying that it should be rescinded now, everything is going in the right direction? To have put Government in charge of so much money, WOW! I really hope there are some Watchdogs in place here!

The Parakeet · Mar 26, 2009

You have to remember that the bailout propped up a lot of banks. It helped them stay solvent and not have to declare bankruptcy due to the collapse of their mortgage backed securities. It did exactly what it was supposed to do. It let them ride it out and restart their business. I assume now that they are making a profit, they will start to pay off the money and buy back their company.

DodgeFB · Mar 26, 2009

The Parakeet said:
You have to remember that the bailout propped up a lot of banks. It helped them stay solvent and not have to declare bankruptcy due to the collapse of their mortgage backed securities. It did exactly what it was supposed to do. It let them ride it out and restart their business. I assume now that they are making a profit, they will start to pay off the money and buy back their company.

One of our bankers said on TV "We don't need any help at our bank. We are locally owned and did not participate any these risky loans." So according to him they are still funded just as they have been through all the years the bank has been in business. And are not having to foreclose on a bunch of homes. This he says is due to they made sure the people they loaned the money to were not buying more house than they could afford. And all their loans have always required at lest 20% down at closing.

No this is not my bank. Mine is a big bank. Not sure how they are doing.

GM admitting possiblity of failure

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