GM's debt reduced to "junk" status

[Sparky2263]

http://www.forbes.com/home/feeds/ap/2005/08/24/ap2191181.html

I was just reading about how GM's debt was reduced to 'junk" status.

Know why? When a business has no practical way, barring major changes, to pay it's anticipated future debt, it's status is reduced to junk. Meaning no one wants to touch that paper with a 10 foot pole. Except for buyers of junk debt who charge exorbitant rates when a default occurs.

And why is this? GM is worth more in pieces than it is as a whole. By a ton. And that's not necessarily a bad thing.

Imagine, the "Big 3" become the medium size, leaner meaner 7.

Hmmmm........


For you guys that understand bidness http://forums.s-series.org/images/smiles/icon_wink.gif here's the numbers;

Gross sales (EVERYTHING inc.) 190 billion

Outstanding debt 170 billion

Net loss last year (not lost
sales, recaps, etc. NET
LOSS ON REVENUES) 1.2 billion

Their debt was reduced to junk status meaning borrowing costs increase. Who wants to give cheap money to a company whose debt is about to overtake gross sales? Nobody. Their money is going to be at a higher price further aggravating the bottom line.

This is why they are in negotiations with the unions on health care benefits. They can only trim operating costs so much. Their future health care and retirement obligations? A staggering 400 BILLION dollars.

The writing is on the wall gentlemen. Institutional stupidity isn't going away.

I give it 2 years.

http://moneycentral.msn.com/investor/research/profile.asp?Symbol=GM

[j894]

That sucks. lotta new stuff coming out maybe that will get them
out of the red a little?????

I was gonna buy a few shares of GM, still not sure about it.
hmm
will they make a comback (given their new stuff is successful) .........................................

[Sparky2263]

If the company splits (re: Ma Bell in the 80's) the stock will weather the split and be worth a ton down the road. Stock market is due to take another hit soon. A recession is brewing on the horizon and then you'd have a buyers market. It's still a sellers market right now.

[Sparky2263]

Here's an example. KMart. Bankruptcy couple years ago. Shares taken off the big board because they were trading under a dollar.

Fast forward to today. Shares closing over $100 a pop. A $1000 investment then would be worth a hundred grand today.

In other words, make the right move at the right time, you're set. It's all timing.

[HIM]

If their stock drops cheap enough Id pump money into it. Whats the worst that can happen you could lose a lil money. In the long run though you could help save the company and possible stand to gain a substantial amount of money if they do make it big again. All itll take is a little ingenuity and theyll have the next big thing out there and well be back in business. I couldnt imagine the government would allow GM to go bankrupt. If that happened all those people would be jobless and then what. Welfare and unemployment would be my guess. I cant fathom how much of a strain that would put on the economy. Rumor had it that Toyota was thinking of buying them out. I personally hope that doesnt happen since there is only 2 real american auto makers that produce vehicles on a broad scale, GM and Ford, Id rather have ford own gm than any foreign company next thing you know toyota will own gm and then all well have 4 door hybrid camaros running around....... that was a stab at the Charger........ They shoulda never discontinued the camaro/firebird series since now no one has the ability to own a gm made muscle car other than the gto and corvette. I do read alot of magazines and I often read muscle mustangs and fast fords since I do admire the craftsmanship in the mustang and they are even backing the chevy and dodge guys stating that if gm and dodge dont make something to rival the mustang then ford doesnt have to compete with them thus they dont have to make their product better just to please a ever growing and demanding consumer. Basically they fuel each other. When Ford builds the GT500 then chevy, theoretically, should answer back with a bad ass camaro/firebird or whatever then making dodge have to make a even faster muscle car which then starts all over again and thus improves the product. Idk about the rest of you guys but as you may or may not like the colorado/canyon series wouldnt you rather see those rolling around and at least take pride in knowing its from our land instead of it being a yota badge. As much as gm and ford guys back their favorite company we are all realistically fighting the same battle. To make our product just that much better and keep americans employed. Ill do my part and invest in the company that at one time created the badest ass truck series to ever grace the mean streets of america..... the s-series........ and who knows the dime may make a triumphant return one day. You know like the gto did. Till then its hopes and dreams I guess and maybe a few of my hard earned dollars wouldnt hurt.

[j894]

I'd never buy a colorado, or canyon. At least with its current engine options.
Look at them taking up all the space on the lots, big hit there. Yeah, the 3.5l i5 is kinda
groud breaking whatever you want to call it. But its junk. They should of put
all that research and development into, engineering a large displacement v6
variation of the Gen. III smallblocks, Or something better. Some people want
their $29,000.00 truck to be able to do work.

Maybe is they offered the 4.8l, or something I'd buy it. But until
then, I aint touchin it with a 10 stick. Unless one is given to me.
I like a bunch of GMs stuff. But they just keep making stupid mistakes.
Time to retreat and regroup under new leadership

[HIM]

Yeah but even before a v8 is even considered would you honestly rather see that chevy badge on that colorado or a yota badge either on it or behind it. I know if they sell out Im going to ford. Dodge isnt really impressing me much with their 4 door charger although I am a die hard dodge fan since almost all my family has worked for chrysler at one point in time or another and 3 family members still do. My point is were gradually selling out all of our properties and businesses to foreigners.

[Sparky2263]

More shock waves. Wonder when they're gonna hit the mark?

http://www.foxnews.com/story/0,2933,171652,00.html