What Should You Know About The Reborn General Motors?
Cupcakes all around! Government General Motors emerged from bankruptcy today, and the shiny new version of GM is now leaner, in charge, and ready to manufacture cars that people actually want to buy. Maybe.
How are they doing? Hard to tell, says Marketwatch in an extended car-racing metaphor. GM stock won't be issued until next year, so it's hard to tell what the markets' view might be. Guess we'll have to wait until the new company starts producing actual cars that don't suck.
For details about the new GM, its ownership, and how the change affects current and future GM customers, visit this very thorough guide at Consumer Reports Cars.
What the post-bankruptcy GM means to you [Consumer Reports Cars]
GM back in the race [MarketWatch]
(Photo: Cantoni)
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Comments:
Does anyone have a total for how much bailing out GM has cost the US taxpayer to date?
@laserjobs: 30-50 billion, the article doesn't make it really clear.
What is worth noting, is that it's not like that money just went down a rathole (unless you argue, maybe correctly, that GM is boned long term). That bought an ownership stake, in what might turn into a decent company again.
We'll see.
what about those who have stock in GM? What happens to their stock?
I wonder if they are going to take a cue from Ford, which I have noticed has started to use more European styling in their cars. Face it, as much as I love them, American cars suck style wise. They have recently begun to get better, but when you look at the Focus, the Euro design fits SOOOO much better to that American market they are aiming for with that car. Yet the American version looks like someone had some extra Lego's and built the prototype.
@MacQix: You are stakeholders in the GM bankruptcy. They owe you a debt but it will be settled for a fraction of the amount they owe.
The GM you had stock in no longer exists. Their assets were liquidated and sold to GM.
@socalrob: They really do. Every American car I can think of looks like a 2 bit knock off of a foreign car.
@aphex242: But didn't our ownership stake get liquidated/repacked/devalued in bankruptcy. So, yes we still own GM stock, but how much in stock do we have compared to how much we put in?
Also I'm interested if the new "owners" can work together. The UAW trust ownership is the one that's most interesting. By definition, there needs to be less "us v. them" beacause now, "us" is "them."
I hope GM can get out of trouble. I love the GM V8's. Great motors. But, until GM can get out from the govt umbrella, and Detroit can fix its problems, I'm buying the M3 coup instead of the Corvette.
Are we done bailing them out? Is this it?
@ARP: "But didn't our ownership stake get liquidated/repacked/devalued in bankruptcy. So, yes we still own GM stock, but how much in stock do we have compared to how much we put in?" No the governments shares didnt, people who owned it prior to the bankruptcy though did get devalued.
I don't understand why GM even restructured...a floundering economy when many barely have enough money to put food on the table and make rent is not a good situation for drawing in car buyers. (Of any make, really)
I'm so damn tired of hearing about GM. All this 'new' GM crap is just that, crap. How many times over the past 20 years have we heard that a new dawn is coming for GM?
I will believe that GM has truly been reborn and remade when I see it. So far, absolutely nothing I have read or seen leads me to believe anything will be any different.
@aphex242: It'll never get its old position as the largest company in the world, or the largest automaker, I'm sure, but I think they'll do alright. They didn't run themselves too badly, they just misread the market and were holding out to be right...and held out too long.
@WiglyWorm: For you maybe. Dont forget prior to the Bankruptcy despite the claimed "Crappy styling" more people bought American over the Japanese. And even after the more AMERICAN styled cars like the Malibu and Camaro are hot sellers
So obviously they are styling their cars right, its just not a style YOU like.
@ARP: That strikes me as a conflict of interest, the UAW being the owner, at least in part, of GM and Chrysler.
@WiglyWorm: There are some American cars I like the look of...in divisions that have been shuttered or spun off...
GM has been making cars people want to buy. In 2007 they sold as many cars, and got as much revenue, as Toyota. Yet while Toyota made a profit GM lost billions. This isn't about sales, it's about costs. And unfortunately this government bailout and restructuring did nothing to address that. The only way GM can be saved is if they can eliminate their legacy costs, and that means the union is finally going to get what's coming to it.
Are they still ditching Saturn? I kinda like that Sky...the Pontiac Solstice looks pretty good to me, too. A shame Pontiac is getting killed.
@Jim Topoleski: That's a pretty dubious claim. Ford, Chevy, and Chrysler had a combined market share hovering at ~50% before the bankruptcy.
But, come on now, Aveo vs Fit? Taurus vs Camry vs Civic?
You can't tell me you'd take the american version in any similar styled match up, can you?
I'm still mad they canned Pontiac (and the new Trans Am). Now I drive a Hyundai, and I'm very happy with it. There is supposedly some sort of Hyundai coupe or roaster coming out with the Genesis engine...that sound exciting to me.
@Con Seannery: Nonsense. It's always been in the UAW's interest for GM to succeed, and that's now truer than ever.
@Con Seannery: They are ditching Saturn, but as far as I know Penske-yes, that Penske- has decided to pick them up.
One or two of the more iconic Pontiac models are also sticking around, but I'm not sure if they are going to be with GM.
@AlteredBeast: Yep. It looks pretty sleek but style-wise it still looks like a genesis. It's supposed to be in the mid to high 20k range.
@Con Seannery: I think the UAW wants GM to succeed. But I think I understand where you're coming from, they've been bitter enemies for so long, it feels like a lion sleeping with the lamb situation.
But I don't know that things got really bitter between them until more recent history when GM executives kept paying themselves higher and higher salaries and bonuses. The UAW saw that and dug in harder and harder on medical, pension, salaries, job preservation, etc. Essentially, the attitude was "if they can pay themselves so handsomely, why not us?" In turn executives felt they deserved more than some pissant line worker. Little regard was given by EITHER SIDE about how the escalating payments would impact the company. So their competitive/vengful behaviour, along with poor strategic decisions, poor quality control, engineering, etc. led to their demise.
A long way of saying, they used to not hate each other so much and hopefully, they can be friendly now that they're in bed together.
Everyone always says that GM only makes cars that people don't want, they are stuck making giant SUVs that no one wants, etc. and maybe I'm crazy but everyone I know DOES want an SUV, a giant V8 truck, or a fancy muscle car. They point at models that GM or Ford makes and they say "that's a real good looking car". The families that would be purchasing those "cars that people don't want" haven't gone anywhere; they're just forced to put off their car purchases do to a poor economy.
Of course, the other giant hurdle is the whole quality thing. These people that look at GM or Ford and while they see desirable cars, they know that a GM or a Ford will likely need major work before they hit 100k miles. I absolutely wouldn't mind a new Camaro or a new Volt....or a new Corvette, or a new Silverado, etc if it wasn't for these reliability issues. My father, a retired transmission mechanic, claims that GM started dying in the mid to late 80s when foreign cars were suddenly cheap, reliable, and had somewhat acceptable styling as Oldsmobiles straight out of the factory (sometimes right outside of the dealership) were having to have transmissions rebuilt due to design flaws. I think people still do want to buy American; they just want something with a warranty that will cover everything to around 100k miles, not just the powertrain because face it - many of us have had a bad experience buying American. Seriously though, I look at foreign cars, and while I know I'm compromising on style, I feel more confident that the car won't spontaneously implode as it gets older.
@Jim Topoleski: I don't think its the styling, I think its quality mixed with style. People who by civics and Malibu's are trying to push the envelope. They want a halfway decent looking car that lasts. This is where I think GM fell down.
@WiglyWorm:
GM does NOT owe stock holders a debt, that would be for bond holders. Stockholders rarely get anything in a bankruptcy, as most companies only file for bankruptcy when they are losing money, and their assets are greater than their liabilities. Stock holders are paid AFTER the liabilities are paid off, and if all of them don't get paid the stock holders get nothing.
The "old GM" is still around, but simply a holding company for unfunded liabilities, a defendant in lawsuits, and other non-profitable adventures.
Old GM stock is currently around $1.15 (went up 33% today, I didn't bother reading why, but it could be because people heard "GM exited bankruptcy" and didn't realize it was the "new GM". I only expect it to go down from here.
The union has agreed to numerous wage cuts, as well as taking ownership in the new GM in exchange for forgiving liabilities they were owed for pensions and medical expenses.
GM also got rid of debt that they were paying interest on, and they have cut many management positions and streamlined their decision making process.
This coming from a guy who owns Ford stock.
Here is all you have to know-
New General Motors: see British Leyland
(G)arbage (M)otors?
I STILL want a pontiac G8
I could care less what they do. I have an essentially brand new vehicle. Bought a 2005 model brand new, (paid in full) which now has 9000 miles on it. The last year accounts for 1200 of those, so the amount goes down every year. So, I'm averaging 1800 miles per year.
Which means, given my age of 42, either this current vehicle will last me until long after I'm dead, or until the oil runs out and only the rich are able to buy gas. Either way, I'm never buying another vehicle. And it feels good to know that that expense is eliminated from the rest of my life.
@WiglyWorm: The revived Taurus is larger than the Camry (and even a bit larger than the Avalon!) and IMHO seems to be aiming more at the Germans' market, like Hyundai is with the Genesis. The Five Hundred/first new Taurus has a very VW Passat-like profile, and it looks like they're positioning their newest Taurus to compete with full-size German cars in terms of styling & bundled gizmos.
(I do overwhelmingly agree with your point otherwise, though. And it looks like Ford is scrapping their US Focus and bringing back the Euro design for that reason!)
@BZMedia: sure. an '05? wait a few more years when that rattletrap starts falling apart -- or you can't afford the replacemnt engine/transmission. you WILL be purchasing a new vehicle in your lifetime. unless you live to be 43.
Rather than be pessimistic about American car makers, I hope other Americans will at least consider them. I'm not encouraging protectionism or buying an inferior car in order to support the U.S. economy, but at least new models should be looked into to determine if they're of better or equal value to other cars. Automatically discounting a car because of its maker doesn't seem prudent.
We make the economy we live in. If people want U.S. jobs to be created, they at least have to consider American-made products rather than automatically assume that another country is going to do better.
You could not pay me enough to buy a Obamamobile,never.
This government likes to shove chiniese junk down peoples throats, I'll only buy oreintal made cars.Fuck GM and this government!They should have let them go out of bussiness just like a mom and pop buissness in hard times.
@JoeDirt: I don't blame you. I'd take an M3 coupe over a Corvette any day of the week.
Luxury + performance, or just... well... performance and iffy GM backing. Seems like a no-brainer.
@Jim Topoleski: People want good looking cars that aren't shoddily built. GM in particular seems to think only their big expensive models deserve to look nice and feel comfortable, and seems to think small-car buyers aren't important and therefore don't deserve any comfort or style. In the old days of Detroit, if you wanted a better car, you traded up to the more expensive mid or full-sized model, but that kind of thinking doesn't fly in 2009.
Ford seems to have figured that out, and with any luck, the new GM and Chrysler will figure that out too (if they don't, they're never going to make any headway in the small car market).
People also want reliability and longevity. Every American car I've ever had was a total piece of junk by 110,000 miles and yet most Japanese and European cars seem to be good for at least 150,000 miles and often 200,000.
@Bryan Fernandez: The Post Office is still around, even though it constantly loses money.
The government pays the bills. We'll still be bailing out GM if no one buys their cars.
what you should know: don't buy a GM cause they suck, until they bring in Japanese auto engineers they need to lay back with their idiotic 3 ton vehicles
@ShariC:
see job creation should not be a motivating factor here whatsoever, I don't ever buy a product thinking what effect it has on 1. the economy 2. supply jobs. Auto workers get paid VERY well for what they do so forgive me if I have little sympathy.
Laura, you might want to put up a notice like the one we had for the NRA article. That would make it easier for Roz to decide what is fair game for gutting ;)
(Since it is clearly not going to deter any sniping.)