“While the fate of General Motors as a company is being debated by legislators and others, investors would agree that GM will be removed from the Dow Jones Industrial Average as the common stock faces the likely prospect of heading to zero despite efforts for a bailout of workers and suppliers,” Mike Havrilla writes for Seeking Alpha.
Among a short list of companies (Abbott Labs, Amgen, Cisco) to consider as a replacement for GM on the Dow, Havrilla also suggests Apple Inc.
Apple (AAPL) has emerged as the technology bellwether and stock market leader, soaring over 900% in the past 10 years and its iPhone is outselling Motorola (MOT) and Research In Motion (RIMM) while its Mac and iPod brands continue to gain market share.
Full article here.
Don’t worry. It doesn’t matter which wing of the Business Party is currently in control of the government. They will save at least one of the Big Three because they need somebody to build their tanks and humvees for them.
Don’t forget the contract to supply the new President with his motorcade fleet of heavily armored limos and SUVs. Which are guaranteed to be either GM or Ford (at least in hood ornament, kinda like NASCAR).
See
The worst-case scenario is all three Detroit makers end up under the government, and are subsidized & ran like Amtrak.
The global auto industry has too much capacity chasing too few customers. A massive shakeout (which might kill some import brands as well) is overdue.
R.I.P. GM. The unions have destroyed your company. I hope you don’t get a bail out.
Dude, it’s a catch-22. Either the taxpayers:
1. Bail out GM.
2. Pick up the UAW’s pension plan when GM fails.
Love or hate the UAW’s gold-plated pensions, consider the elderly retiree who gets the letter “Sorry, the company you worked your career for has failed. We will no longer provide income that you were counting on.”.
There are no easy answers here.
“I understand many Americans do not believe 40 or 50 miles per gallon is feasable and would prefer to make mega-billionaires of Arabs in order to swan around in gas guzzlers like they always did in the good ole days.”
Larger cars hold more people, more cargo, are safer in collisions than smaller cars. If fuel efficiency was the only factor that mattered, everyone should drive motorbikes for single passenger transportation. They are *far* more fuel efficient than even the most fantastically fuel efficient car, take up less space to park, and are more fun to ride on.
Oh how I hate to get into the political debate in MDN…. but….
The current set of republicans we have, for the most part, are NOT republicans. They are not on the right anymore… they sit in the middle. Republicans use to be CONSERVATIVE. Have you seen the debt Bush has racked us up into lately? Doesn’t sound conservative to me. Take a REAL conservative like Ron Paul, and he now sounds like a “whacko” because he tows the TRUE republican line… CONSERVATISM! Follow the constitution, fiscal responsibility… etc… etc… etc. Basically all the stuff old school republicans embraced.
More on point… GM is a company, they need to produce a product people want to buy. They need to offer benefits to their employees that they can provide while also being profitable. They are a business, not an NPO. Government is far to large and outreaching. I sure as hell know that if the company I work for has financial problems, Bush, Barrack, or whoever is in charge is not going to come bailout my company.. nor *SHOULD* they! It is my companies obligation to self preserve; NOT the governments job.
The Dude abides.
“Love or hate the UAW’s gold-plated pensions, consider the elderly retiree who gets the letter “Sorry, the company you worked your career for has failed. We will no longer provide income that you were counting on.”.”
This is why you need to diversify your retirement portfolio, and not rely solely on one source. Pensions are great but they need to be a portion of retirement, not the only source.
That said, it would truly suck for those in that position, but it’s not sustainable to expect everyone who doesn’t work for GM to continually pay for those that did. I can’t provide a magic answer but having the government bail out a failing company or the workers left behind is a long term losing proposition and can’t be set as a standard because it discourages companies from being responsible, which is death to the country.
And one of the reasons US automakers have troubles competing in the global and domestic market is the auto worker unions. Guess who they supported in the election? Guess who Democrats pander to for their votes and what they will do for them?
You are telling me the automakers will be stronger now that Democrats are in power? Especially with Barrack “credit-card fraudster/friend of ACORN/redistributionist-in-chief/lying about not talking to HAMAS” Obama? Get real.
@ Obama Recession:
“You make junk, so you can’t sell it and then you fail. Unless you get too big, then you get a Democrat bailout. That way, you can continue to make junk, eventually fail again and then you get another Democrat bailout. It’s like public housing and Welfare: it never ends – until a Republican revolution rolls around to clean up the mess. The next one is due to begin in two years with the midterm elections.”
Seriously? The Democrat bailout? You are that retarded? The New Socialist Republican Party (Bush & Co.) put that together, you idiot. And his New Socialist Republican Congressional friends were more than happy to sign on once enough pork goodies were tacked on.
Republicans are the most un-American, un-patriotic, self-serving scum on this planet, and they love the wealth re-distribution as much as any Democrat. The difference is they feed our money to the rich. You can revise history in your little pathetic forum posts all you want, but the American public knows the truth.
So basically, screw you, Obama Recession. The Republican Party is toast because it abandoned fiscal conservatism. It’s a dinosaur. There will never, ever be a Republican revolution. Within the next eight years, TRUE conservatives (i.e. not you, Obama Rev) will form a new party, a truly conservative party, and leave you right-wing fanatic social neo-con whack jobs in the cold.
As we all know, both parties are equally bad. They had decades to fix voter problem, set standards, and allow the elections be done in a unified way.
No party has set to correct it.
If you sent a group of investigators to fine comb their life, none would submit. They all have been on the take.
GM and the other American car companies need to die. Not because they produce bad products. Simply to compete, you must be on a level playing field. And they are towing too much of the union requires, pay, and other benefits.
Toyota and the other car companies are non union. They make profit as the car rolls off the line and then charge more for it. GM is losing as it rolls off.
Plus small cars were too costly to make a profit. All the tax, union, and corporate cost placed on the American cars.
Fact, Mercedes is the less reliable car in the US and it sell. People stand behind it. Go figure.
Fair price for a days work and since I work in a union, I get paid very well for what I do. I am happy and make the most of my money. I know others make less for the same work. But, I work and work hard because I believe that others should not pay for me being lazy. It it not the same for the majority of union workers who endlessly complain, do whatever they can to get out of work, use the union to protect them when they are caught, and they always want more money even when their work is horrible.
If they know they can get away with it they will.
It is not all Americans, we produce some of the finest devices in the world when we put our pride in it. Toyota makes their cars here and ships them over seas because the quality is so high.
It is the lazy, protected, socialized, give me, Americans that still have their jobs because of rules that protect them. They are the mistake- not our country.
Larger cars hold more people, more cargo, are safer in collisions than smaller cars. If fuel efficiency was the only factor that mattered, everyone should drive motorbikes for single passenger transportation.
Remember, a homely lumbering school bus with single-digit mileage is one of the safest and (arguably) most economical forms of mass transportation.
Just don’t expect to impress the chicks, unless its redone as a party bus or something.
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We all know the American automotive industry has made missteps over the past decade. Lack of a cohesive evergy policy and misguided tax breaks encouraging the production of bis SUV’s has not helped. RE the documentary “Who Killed The Electric Car”. Back in the late 90’s the industry was tasked by government to create an 80mpg family car. Chrysler came close with the Dodge ESX 85. The problem , it was a hybrid diesel and the diesel portian would not meet emmisions. For 80 mpg I think this could have been relaxed.
GM had the lead in electric cars with the EV1. The problem corporate arrogance and a resentment of being told by a particular state (California) what kind of cars tro manufacture. The sued the state and won and recalled all biut a few of the cars that are in museums anf scrapped the program to buy Hummer and create a new division. That misstep was encouraged by the current administration’s tax breaks to small and medium sized business to write off the purchases of up to $100,000 per vehicle.
The UAW and automotive industry has had it’s problems in the past and I though the Saturn experiment as it began was a great first step towards a modification of that partnership for the benefit of both parties but as with the EV1 concept if you plane a seed in scorched earth it is bound to die. Saturn has now basically just replaced the now defunct Oldsmobile brand and all but the worst consumer friendly policies seem to have been terminated (no negotiation on price).
Cry all you want ablut regulations but the American automotive industry has been telling the American public what type of cars to buy since after World War industry. They fought seat belts, air bags, CAFE, and have stifiled any meaningful advances in the industry that would not make them a ton of money in after market cost (planned obselesence). The new administration has a policy that no cabinet members can have any affiliations past or present with lobbiests.
I say if they want bail outs there has to be some conditions to push the industry ahead. That would include long haul trucks as well. There are tens of thousands of hybrid city busses, I’ve yet to see such technology in Peterbuilt, Navistar, Freightliner, Kenworth, Ford , Chevy or GMC big trucks. WIth deisel between $3 and $5 I would think there could be some tax incentives there for either retrofit equipment or redesign.
Have fun reading- it is not all rosy.
http://www.standardnewswire.com/news/105981712.html http://www.automotive.com/auto-news/02/26802/index.html http://www.theautochannel.com/news/2007/02/28/038601.html
Toyota and the other car companies are non union.
As of right now they are.
If any of the big three topple and/or cause massive layoffs, the UAW is certain to become extremely aggressive towards preserving itself. And that means organizing non-union plants.
If card-check (the Employee Free Choice Act) is enacted, expect a quantum leap in union membership numbers.
If you think that Toyota wants to see GM collapse, think again.
In fact, it has been Toyota’s major long term goal to manage the collapse of the American auto industry. If it happens too fast, Toyota can expect a backlash.
So, expect Toyota to help GM/Ford/Chrysler survive this crisis.
If Apple spent money keeping Steve Ballmer as CEO of MSFT, that would be money well spent. So will Toyota’s.
“the same club-of-giants as GE and 3M”
Market Capitalization:
GM: $1.78 Billion
3M : $43.23 Billion
AAPL : $ $84.24 Billion
Anything can happen in the kind of market we’re seeing today, but I don’t expect Apple to drop back to down the kind of valuation of your so called “giants”.
-jcr
Either the taxpayers:
1. Bail out GM.
2. Pick up the UAW’s pension plan when GM fails.
You left out:
3. Follow the constitution, and let GM either find a buyer or go out of business.
-jcr
If card-check (the Employee Free Choice Act) is enacted, expect a quantum leap in union membership numbers.
In which case, expect the auto industry to forget about manufacturing in the USA for the foreseeable future.
-jcr
Dodge ESX 3 check the website http://www.popularmechanics.com/automotive/motorsports/1268751.html?page=2
If GM amd Chrysler were to merge GM would probably neuter and squash this concept. Managment shares as much blame as unions in the drive to outsourcing. A top CEO ‘s pay does not need to be 600 times the rank and file. That is just plain greed. How about putting that excess cash into R&D;, and not wasteful inefficient R&D;.
“Remember, a homely lumbering school bus with single-digit mileage is one of the safest and (arguably) most economical forms of mass transportation.”
But it’s so hard to fit it in subcompact parking spaces!
I find it ironic that when one of the 30 companies reflected in the Dow falls flat that they want to replace it instead of letting it be a true reflection of the economy. It’s like taking the M3 out of the inflation report and saying we have low inflation when the amount of money supply in the system has diluted the value to next to nothing. Can anyone hear the stampede of hyper-inflation in the distance? Remember it was an economic crisis that brought Hitler to the forefront. Oh, let’s not forget Napolean, Mussolini and Lenin.
bobchr: “A top CEO ‘s pay does not need to be 600 times the rank and file. That is just plain greed.”
So all workers should work for free, and not expect pay, because getting paid for work is “greed.” What insanity, and arrogance that passes for thought on the left.
How about this, instead of complaining about their pay, work hard, acquire their set of skills, bust your ass and get promoted to their position and then you can collect their pay, but no wait, you’ll only get 3x an average worker salary. That seem more fair to you?
@The Obama Recession
BAHAHAHAH!!
He’s not even President yet, and you goddamn cons are already blaming him for the mess that the repugs made!!
Leave it to a con to always blame the Dems for the messes that the repugs make.
Apple should have been more in a hurry to collaborate with Hayek’s electric Smart car!
Taht would have fitten with the actual problems… GM could have built these cars under licence and save jobs and environement with lots of profits.
@doc
Sorry man… but Toyota cars are just way better then any car built in America.
It may hurt, but it is the PLAIN truth.
If GM is going under is because they don’t make good desirable products. The same reason why Apple is doing good, but inverted situation.
Note to Obamacommies,
Here’s how capitalism is supposed to work:
If a company is stupid enough to pay its CEO 600 times that of the average worker while the company is disintegrating, then the company deserves to go out of fucking business to be replaced by a better, smarter company.
Note that the words “government” and/or “bailout” do not appear anywhere in that sentence.
To see how Obama’s brand of gov’t “works,” please consult the ash fucking heap of history because they have all failed or are in the process of failing.