General Motors Is Headed For Bankruptcy -- Again

[Jorgen]

Yep, I'm sure no other industry would have been impacted in that case.

Also my company makes more products than just automotive, we are in the range of the 150-200th ranked ($20+ Billion) company world wide for all industries.

Really though if you look at my car list I don't own American made cars and can't say I would buy one.

[Ryan Stewart]

Thats a weak argument. Or perhaps the economy isn't doing so hot? Seems like there might be a few more things in play other than opinions.

That is an even weaker argument. Its a litter, you have all of the world's carmakers in that litter. Why is it only that GM and Chrysler are the runts? Why are the Koreans and the Japanese able to steal the budget buyers and the Germans have no trouble stealing the premium buyers in this "tough economy?"

You're attempting to move the goal line to ignore the issue.

[Jorgen]

You act like the Detroit three have no global or local market share. GM still does 15-20% of total market, peopel here might not like them that much but people are still buying them.

Their market shares are decreasing but you can't expect to have the same share as when you were the only options.

[Ryan Stewart]

So you admit the market share is declining but I'm still wrong?

[Jorgen]

Your informaiton is correct, they are losing marketshare. There is no arguement here. Fallacy of composition none the less.

The point is GM at 18% YTD, Chrysler at 11.2% YTD of an 8.5Milliion unit YTD sales volume is a little more than you appear to be willing to admit. The way you want to make it sound is as if they have a smaller marketshare than Hyundai, Toyota, the all holy BMW etc. and we all know that just isn't the case. Also considering the closure/sale of side brands the parent brands figures have reduced in that case, (Pontiac, Saab, Hummer, Saturn...)

When you add new quality or value companies to an industry the market share balance is likely to shift. Since Android operating system based phones exceed the sales of iPhones should we just put Apple down, I mean they used to have a better share of the market.

[Vedubin01]

GM had a market share of around 50 percent in its heyday. Now just under 20 percent. Yet GM still has the mindset of what ever they build people will buy. And that is clearly not the case. Toyota and Hyundai also dont have the overhead and unions that GM currently has/carries helping them though this hard economic times. The difference between Apple and GM is that Apple keeps reinventing itself yet GM continues with the same.

[s14pwd]

Just because jobs will be lost does not mean a company should be exempt from failure. Heres an example, in the 80's Bell Telecommunications was heavily investing into the R&D of telecommunications. When the company began doing poorly, a new company formed, Nortel. Nortel became a telecommunications giant. They were massive, employing thousands of people across the globe, but guess what, they went bankrupt not too long ago. Did you know that RIM, the markers of the blackberry formed out of Nortel as well? Now that RIM is basically done who knows what will pop out next.

When companies fail, new companies form, period. They may not be as big, and people may have to find jobs else where, but just retaining jobs is no excuses for bailouts as its a temporary solution, the company will continue to be inefficient and as seen here, and be back in the same boat.

[rwh11385]

Ryan you should remember that comparisons to last year include the wave of business when the earthquake knocked down Japan supply for some time.

GM's market share was 15.6% in March 2011, then jumped to 20% July YTD after Japan was hit, and now people are making short-sighted conclusions about 18% market share. . . Even though that's where they were before the quake.

Looking only at this summer compared to last points out who ignores context and who actually cares to gain background before decisions. Considering only one year is about as useful as comparing market shares to 5 decades ago.


In addition to having fewer brands and models since government oversight killed some, they also no longer are gaming purely on volume like they were when selling cars as cheap as possible to remain the #1 in car sales. That strategy led them to bankruptcy with no real
meaning. Selling 18% at higher margin is better than higher share at slim margin.

[E30SPDFRK]

I tend to stay out of this section of the forum, but I had to respond to this.


If your company makes products that people don't want to buy, you either go out of business or change your products around so that people do want to buy them. That applies to every size company, from an ice cream shop all the way up to a big company like GM.

If you continue to work for that company even though you know people don't like it, that's your fault. When they go under, you only have yourself to blame that you're now unemployed.

It sucks that there are so many people that would lose their jobs if GM went under, but they should have jumped ship long ago. I like GM because they do occasionally come out with a good car, but if they can't consistently make cars that people want, then they need to go. They've had time and money to get them back on the right track and they still haven't. No one would complain about that shitty ice cream shop going out of business, GM should be the same way.

[Vedubin01]

if you continue to work for that company even though you know people don't like it, that's your fault. When they go under, you only have yourself to blame that you're now unemployed.

amen!

[Jorgen]

GM's market share was 15.6% in March 2011, then jumped to 20% July YTD after Japan was hit, and now people are making short-sighted conclusions about 18% market share. . . Even though that's where they were before the quake.

Looking only at this summer compared to last points out who ignores context and who actually cares to gain background before decisions. Considering only
one year is about as useful as comparing market shares to 5 decades ago.

18% is a fact YTD, may go up may go down through the end of the year. I am not comparing to last year. Thai issues, Japan issues, Toyota run away car issues, there have been problems over the years that sway results for a given period. I am just saying 18% isn't shit, even 15% isn't shit.

I do have to agree anyone who wants to pull in their peak marketshare is just really trying to sway facts. A market with a vastly different composition of producers and total sales isn't comperable to current day.

I am just trying to not that saying 15% 18% 20% is bad really isn't realistic.

[Jorgen]

If your company makes products that people don't want to buy, you either go out of business or change your products around so that people do want to buy them. That applies to every size company, from an ice cream shop all the way up to a big company like GM.

If you continue to work for that company even though you know people don't like it, that's your fault. When they go under, you only have yourself to blame that you're now unemployed.

It sucks that there are so many people that would lose their jobs if GM went under, but they should have jumped ship long ago. I like GM because they do occasionally come out with a good car, but if they can't consistently make cars that people want, then they need to go. They've had time and money to get them back on the right track and they still haven't. No one would complain about that shitty ice cream shop going out of business, GM should be the same way.

Saving GM and Chrysler was cheaper than letting them fail short term and long term for the government. Many may not want to believe it but that is your opinion and I will maintain mine.

Should we stop subsidies for all farms to keep them going? I mean they can't survive without assistance so we should just let them die. Who needs food.

Is it better to live in a country with minimal production capability and knowledge? That doesn't make you vulnerable by any means. National security is worthless.

As a side note the comment on you should lose your job if you work for a company that isn't doing well is reasonable. I base positions I take on the balance of short term income spikes v. long term stability. If person A doesn't take the job person B will and teh government will still be there having to backstop their unemployment and costing us more money.

[bmwstephen]

sooooooooooooo why are we complaining about wall street and big banks? they seem just as valuable as GM and other too big to fail companies. If we have to love one, we should love them alll

[rwh11385]

18% is a fact YTD, may go up may go down through the end of the year. I am not comparing to last year. Thai issues, Japan issues, Toyota run away car issues, there have been problems over the years that sway results for a given period. I am just saying 18% isn't shit, even 15% isn't shit.

I do have to agree anyone who wants to pull in their peak marketshare is just really trying to sway facts. A market with a vastly different composition of producers and total sales isn't comperable to current day.

I am just trying to not that saying 15% 18% 20% is bad really isn't realistic.

I know you are not, but others are. And it doesn't matter if it is lower % share as long as their operating margin keeps ticking up. BMW is less than 2% but still seen as a successful car company, a lot because of their margin. Even when Toyota was #2, their profits were higher than GM's, so who was the real winner before they took over the first time?

http://www.cnbc.com/id/47030161/GM_s_Market_Share_at_a_90_Year_Low_So_Why_Is_Optimism_So_High

Bottom line: Morgan Stanley likes the way GM is transitioning towards becoming an auto maker focused on growing profits instead of just scrambling to hang on to market share for the sake of having market share.

No shit the world is different, which is why I can't stand opinions who are that completely missing context. (like vedubin's)

GM had a market share of around 50 percent in its heyday. Now just under 20 percent. Yet GM still has the mindset of what ever they build people will buy. And that is clearly not the case. Toyota and Hyundai also dont have the overhead and unions that GM currently has/carries helping them though this hard economic times. The difference between Apple and GM is that Apple keeps reinventing itself yet GM continues with the same.

It was nearly 50% only while Japan, Europe, and Korea were rebuilding from recent major wars. Heck, what did BMW make 70 years ago? What about Mitsubishi? They didn't (couldn't) switch overnight from war planes and aircraft engines to cars to compete with US automakers. Comparing the 1950s, 1960s to today is simply moronic. Yes, they should have taken their rise in the 80s seriously, but that's what competitive markets do - challenge each other and make products better for consumers through it. Their current vehicles are much improved from what they used to be, in part due to competition. (Although they were slow to adapt, especially in the 90s, upgrading would have cost money and that would have made their cars more expensive and lose their silly strategy of cheap and shitty. If they had made better cars because of adding features people wanted or modern technology, people like you would have complained about their increase in price)

You are obviously set to your opinion and disregard any changes that have been taking place, so trying to argue facts is pointless... but you might as well understand context.

The extremists will never change their opinions of GM. There will always be fans of the auto maker who overreact at the slightest negative headline. Just as there will be GM bashers who refuse to see any of the positive steps the company has taken since leaving bankruptcy.

If your company makes products that people don't want to buy, you either go out of business or change your products around so that people do want to buy them.

I like GM because they do occasionally come out with a good car, but if they can't consistently make cars that people want, then they need to go. They've had time and money to get them back on the right track and they still haven't.

They've made changes, although it was too slow and too late to right the ship before their Chapter 11. But even a current Vice Chairman tried to help them out a while ago as a consultant and said it was the case of "Row your boat to the tanker, hit it a few times... see that it doesn't move, and then row back to shore". They have leaders actively trying to get rid of old bureaucracy and fight "old GM" mentality, but ridding a company of bad culture is tough. They are now turning it around and making vastly better cars like the Cruze vs. the Cavalier/Cobalt, and trying to align their huge company to be more efficient and less redundant. But change is hard to push when people like the way it was and their job's might be changed or moved because of it.

http://online.wsj.com/article/SB10001424052702304665904576383522386471918.html

After taking over product development, Ms. Barra eliminated a string of executive positions that came between her and the top engineer in charge of product programs, a bid to streamline decision-making. "She gets things done," said Mark Reuss, head of GM North America.

At the employee meeting in Milford, Ms. Barra heard complaints that GM wasn't focused enough on quality, too slow to adopt new technologies and didn't look outside enough, something she reassured workers was about to change.

http://jobs.aol.com/articles/2012/07/25/gm-simplifies-vehicle-development-cuts-jobs/

General Motors is restructuring its vehicle development process, cutting a layer of management and eliminating about 20 executive jobs.

The company said Wednesday that no one will be fired because the cuts will come through retirements and reassignment to other positions. Currently at GM, cars and trucks are developed under a vehicle line executive, a line director and a chief engineer. Under the new structure, which starts Aug. 1, product lines will be under executive chief engineers.

Eliminating their geographical market groups is a gigantic change, for the better.

[Jorgen]

Porsche also tends to be one of the highest margin auto companies out there. Hell little old Porsche has done well enough on slim share to be a major owner of the whole Volkswagon Audi group.