GM's accelerated bankruptcy ends: Was it long enough?
Filed under: Company News
As GM exited bankruptcy today, the nation's largest automaker -- once the world's largest -- beat its rival Chrysler by two days. The lingering question is whether GM's fast-paced turnaround took long enough.
In forty days, the company has, allegedly, transformed itself from a lumbering twentieth-century behemoth into a sleek, competitive company for the new millennium. It has shed 4,000 white-color jobs, including 450 of its top executives, streamlining its bureaucratic structure.
At the same time, it has transferred many of its underperforming assets -- and its product liability lawsuits -- to "Old GM," a government-controlled company that will be sold off piecemeal to cover part of the automaker's debts. Old GM will, presumably, contain the Pontiac, Saturn, Hummer and Saab lines.
"New GM" has emerged with no debts and $50 billion in loans from the government. The government owns 61 percent of it, and 17.5 percent is held by the United Auto Workers Union, 11.7 percent is owned by Canada, and 9.8 percent is owned by the old company's bondholders.
Of course, even the most radical transformation is relative. New GM is still gargantuan, employing 88,000 workers in the U.S. and 235,000 worldwide. The company's model lineup is expected to stay the same for the time being, although it allegedly plans to unveil newer, more efficient models.
Part of the new GM rebranding may be a new name or a new logo. Some analysts have predicted that the company will change its signature color logo from blue to green, to reflect a new, environmentally sound, perspective.
Regardless of whether the company's transformation stops at a new logo color or extends to a substantive change in the kinds of cars that it produces, it is clear that GM intends to take this opportunity to significantly change its game plan. According to the company, the leaner GM will be able to remain profitable even if car sales stay at their current anemic level.
It will be interesting to see if GM can finally offer a compelling alternative to its overseas rivals, or if this transformation will simply be another case of different name, same model.



























Reader Comments (Page 1 of 26)
7-10-2009 @ 9:41AM
Dave said...
I doubt that GM will ever again make a profit. I for one woulnd not buy another GM vehicle. Anything the US government gets involved in is sure to fail if it involves $$. So far everything Obama has touched has turned to pure SHI-.There is no reason to beleive that this will be any different.
Reply
7-10-2009 @ 11:01AM
Tom said...
I am with you man. I wouldn't touch a GM or Chrysler ever again. The only loyalty I have left for american cars is going to Ford. Since the government took my money and used it against my will to prop up these automakers, had them go into bankruptcy so they didn't have to return the money, I can only hope that GM crashes and burns. By the way anyone else remember when VW was owned by the German government, they made a vehicle called the peoples car, and who else but Hitler was in charge at the time. I am starting to see some very interesting similarities with that time period.
7-10-2009 @ 11:14AM
Mike said...
Everything Bush touched turned to War that lead us to the biggest mess in history, and people think your going to take care of it in 6 mounths or a year. But its going to get straghten out and then the Republicans will find something else to cry about instead of helpping to clean up the mess they and Bush made.
7-10-2009 @ 11:40AM
Tom said...
Mike, I don't think I saw anything about Bush in either of the comments above you. You are so fixated on your hatred that your blind to whats going on. Give it up. Both parties stink but one is in power right now. Live in the present, learn from the past, and get over yourself.
7-10-2009 @ 11:57AM
Pete said...
I agree with you Dave! To have the goverment owned car company is nuts. And to let the Union have 17% when they shuold have all been fired is amazing. Who built these cars that come apart in less than 50,000 miles. Union works! There was a time (1925) we needed unions but not now.
Obama is taking this country down.
Very sad....
7-10-2009 @ 12:35PM
mike said...
I am not an Obama supporter in any way but all the people who say everything he touches goes bad just remember most of it was already screwed or falling before he touched it. As far as GM goes, they will get better, people are dumb and will always go for the new car they can not afford if its appealing to them.
7-10-2009 @ 12:44PM
barbara barrow said...
Oh yes lets give more welfare to our " FREE" market companies>
Will gm change? not without getting rid of all of the old guard so you would have to fire all the top level executives. but where to find new that will try to build a car for consumers and not for "just " profit.....
7-10-2009 @ 12:58PM
mike said...
Who cares what you do? If the mouse trap is better, the world will beat a path to GM's door.
7-10-2009 @ 2:12PM
Gary said...
You should move to Japan, this country has enough airheads
7-10-2009 @ 3:38PM
albert said...
Are the banks still falling off a cliff as they were at the end of the Bush administration?
7-10-2009 @ 4:03PM
pete said...
Mike, you need to do some research. Bush told congress, under both parties, to do something about fannie and freddie 11 (ELEVEN !!!!) times between Aug 2000 and Jul 2008, and they did NOTHING! Barney Frank told congress all was well, and instead of looking closer congress merrily skipped to Frank's tune. Even when fannie admitted to a $1.2 BILLION error on 29 Oct 03; and again on 23 May 06, that they had been overstating income and capital by $10.6 BILLION for years, Frank testified it was a "minor accounting error, and not serious."
When democrats took control of Congress 17 Nov 06, the economy was growing at about 3% per annum, unemployment was holding steady at about 4.5%, and inflation was under 2%.
Between 14 Mar 08 (Frontline exposes the extent of JP Morgan's "toxic" assets) and 15 Sep 08 when Leman Brothers tanked, Bush addressed the economic situation a total of ten times - IN SIX MONTHS! Yet cogress, and democrats (and the media) choose to demean and condemn Bush rather than take positive steps that most likely would have saved us all from the troubles we see world wide today.
Three links for you to hear them in their own words:
http://www.youtube.com/watch?v=cMnSp4qEXNM&NR=1
http://www.youtube.com/watch?v=2I0QN-FYkpw
http://www.youtube.com/watch?v=pY2Ue9wdOZs&feature=related
7-10-2009 @ 3:59PM
deedan92 said...
So do you must keep all your money under your matress too? Or do you actually bank at an institution that theGoverment bailed out ? The best part is they don't have to pay their money back, even a bigger rip off.
7-10-2009 @ 4:21PM
Carl Lee said...
A Men!
7-10-2009 @ 4:49PM
Ichh said...
Bush did a lousy job his second term; but Obama is doing much worse. I can't believe idiots are blaming Bush for the Obama mess. Maybe they are Soros paid bloggers or maybe they are just plain stupid.
7-10-2009 @ 4:58PM
viccorbo said...
My sentiments exactly. If I were to buy a new vehicle today, it would probably be something from Ford. I give them great credit for not taking goverment money. Sad to say but I think anything Obama touches will be a total disaster.
7-10-2009 @ 5:28PM
Roscoe Marve said...
Why do you blame the president for failures he incurred from other administrations? Pres. Obama has only been in office for 6 months. Duhh! Blame the previous higher executives and the local/state/federal gov'ts for the failures. Open your eyes to what really is going on. This is a downhill slide from decades of mismanagement!!!!!
7-10-2009 @ 8:44PM
sleser said...
i agree with you .Im going to take half of my pension and send it to toyota and help pay there gov loans. Dave your a true american.
7-10-2009 @ 8:48PM
Craig said...
Hey Dave,
I totally agree with you. I wouldn't buy a GM car for anything. Obama and his cronies have never ever owned a business so how can they possibly run a business of any kind. Obama and his cronies are mostly all attorney's. This was one of the most corrupt deals of the century. The very ones, the Unions are one of the main reasons GM is bankrupt and Obama gives them 17.5% of preferred stock I might add. What a joke.Anybody that buys a GM car should have their head examined.
7-11-2009 @ 9:36AM
JP said...
I'm no financial genuis, but I have enough common sense not to invest in failing, mismanaged, greedy companies. If they continue the way they are going with their stimulis packages, we're going to wind up like Zimbabwe. With all the financial genuises out there, why didn't he get some input for the best way out of this mess. You can't stimulate the economy with people using their credit cards. Credit is a major factor to why we're in this mess. Shut down all the tax programs and tax everyones paycheck or income at 10% and you'll see the economy pick back up again. This would mean no more taxes on utilities, no state income taxes, no fuel taxes, no more tax returns, etc., etc. The Gov. would get plenty of money to do their thing (after we put the right people in there). People would have plenty of money to keep the economy going and they would barely even have the need for any kind of credit. Anyone capable of working that doesn't, won't get to eat. But this seems to make too much sense. Why does everything have to be so difficult. GREED
http://New-World-Order.itrustgodonly.com/ -
http://death-camps.itrustgodonly.com/The-Obama-Deception/
7-13-2009 @ 9:27AM
Doug said...
The government is involved in the military; for one, which costs money. Last time I checked, it was the best on the planet. And as far as Obama's turning everything he touches to s**t, it would be hard not to considering the pile of s**t Bush left him with.