Will General Motors Go Bankrupt?

[RIDERFAN04]

GM shares are now at $1.66 and they don't have a lot of good news in their favour.
I wonder how bankruptcy will affect my truck warranty or will it end the warranty?


http://www.google.ca/finance?q=NYSE:GM

[bignorm]

In all likelyhoods a bankruptcy will keep the company realatively the same. Although bankruptcy will allow them to restructure (or dump) debt. likely close some plants, and of course restructure there labour agreements and unfortunately for those retired employees restructure their retirement plans. After the bankruptcy process is over you likely won't notice much difference, the GM dealer will still sell you a car, you should still have a warranty (after all the restructured company wants to sell you another one eventually). Atleast thats the way I would suspect it will work, and is likely the only way these companies will get re-structured properly.

[Green in Speedy Creek]

Originally Posted by bignorm

In all likelyhoods a bankruptcy will keep the company realatively the same. Although bankruptcy will allow them to restructure (or dump) debt. likely close some plants, and of course restructure there labour agreements and unfortunately for those retired employees restructure their retirement plans. After the bankruptcy process is over you likely won't notice much difference, the GM dealer will still sell you a car, you should still have a warranty (after all the restructured company wants to sell you another one eventually). Atleast thats the way I would suspect it will work, and is likely the only way these companies will get re-structured properly.

I read something like this awhile ago on MSNBC.com,...
IIRC;
They will likely streamline thier product line-up considerably,..Chevrolet will stay as an entry-level and as thier primary line,....Cadillac will survive but likely with a reduced line-up,...GMC truck will be gone (a chevy is the same thing anyway) Buick will survive in Asia but gone in North America,...Pontiac???? good question. maybe but in a very limited role,...Hummer??? HAHAHA,..they're already dust.
The only question mark is saturn which is ironic because Saturn is the most modern and forward thinking of GM's divisions.

[proudtobegreen]

Didn't dodge or chrysler or daimler go broke a few years ago? Seems I recall hearing that, but it didn't seem to affect things down at the retail end.

[pappcam]

Originally Posted by Green in Speedy Creek

I read something like this awhile ago on MSNBC.com,...
IIRC;
They will likely streamline thier product line-up considerably,..Chevrolet will stay as an entry-level and as thier primary line,....Cadillac will survive but likely with a reduced line-up,...GMC truck will be gone (a chevy is the same thing anyway) Buick will survive in Asia but gone in North America,...Pontiac???? good question. maybe but in a very limited role,...Hummer??? HAHAHA,..they're already dust.
The only question mark is saturn which is ironic because Saturn is the most modern and forward thinking of GM's divisions.

All Saturn does nowadays is rebadge cars built by GM's other divisions. They've ditched the polymer panels which made them unique.

It's already been announced that they're toast anyway.

[Muley69]

Debt holders have a strong claim and position over equity holders. I cannot see any restructuring taking place that doesn't bend over debt and equity holders at least equally.

[Riderfan_Lee]

Originally Posted by pappcam

All Saturn does nowadays is rebadge cars built by GM's other divisions. They've ditched the polymer panels which made them unique.

It's already been announced that they're toast anyway.

Saturn may be spun-off as a company of its own. I own a Saturn Astra (A rebadged Opel Astra built in Europe) and couldn't be happier with it. Great car. I don't care too much that it is rebadged, it is way underpriced because they wanted to introduce it to the North American market. They sell it for $10,000 more in Europe.

From what I understand is that GM won't go completely under, just a massive restructuring and they don't want to lose their customer base so they will honour their warranty obligations with any car purchased under them, like Bignorm said. I guarantee they would be shooting themselves if they cancelled their warranty on already purchased vehicles. It would be one of the dumbest moves they could make.

[RIDERFAN04]

Originally Posted by Riderfan_Lee

Saturn may be spun-off as a company of its own. I own a Saturn Astra (A rebadged Opel Astra built in Europe) and couldn't be happier with it. Great car. I don't care too much that it is rebadged, it is way underpriced because they wanted to introduce it to the North American market. They sell it for $10,000 more in Europe.

From what I understand is that GM won't go completely under, just a massive restructuring and they don't want to lose their customer base so they will honour their warranty obligations with any car purchased under them, like Bignorm said. I guarantee they would be shooting themselves if they cancelled their warranty on already purchased vehicles. It would be one of the dumbest moves they could make.

Hopefully you are right about the warranty. Have 50k on the 07 GM truck now and it has a 160k warranty for the drivetrain.
Don't think I will be buying any GM shares though....

[Riderfan_Lee]

Here is a post from another forum where it was said that Canada has a law in place where companies must honour warranties for products as long as the company has been here for more than 5 years. Looks like Canada already did what the U.S. did except it was done when Trudeau was PM and it isn't going to cost the taxpayers any money.

When you start looking into government regulations (ie. banking and business regulation) protecting the consumer, Canada is in a much better place than the U.S.

[Riderz]

Here is some reality. Obama's administration carried on with the bailouts even after Bush was healvily criticized for handing out bailout money. Obama doles out 16B then recommends GM go into bankruptcy in order to restructure. My neighbour bought a new 2500 with a "ChinaMax Diesel" and the sale is dated March 28 2009. Obamas govnt will honor GM warranty on vehicles with a sale date of March 30 2009, that leaves my neighbour out in the cold. Then GM vehicles will see initial depreciation of up to 50% in the first year, with all the uncertanty. They are done!!!!!!!!! Ford is the "New Number One" in North America!!!!!!!!!!!

[HD Mick1]

Originally Posted by Riderz

Here is some reality. Obama's administration carried on with the bailouts even after Bush was healvily criticized for handing out bailout money. Obama doles out 16B then recommends GM go into bankruptcy in order to restructure. My neighbour bought a new 2500 with a "ChinaMax Diesel" and the sale is dated March 28 2009. Obamas govnt will honor GM warranty on vehicles with a sale date of March 30 2009, that leaves my neighbour out in the cold. Then GM vehicles will see initial depreciation of up to 50% in the first year, with all the uncertanty. They are done!!!!!!!!! Ford is the "New Number One" in North America!!!!!!!!!!!

I agree with your take on this. Ford stocks are presently sitting at $2.73 US and once the dust settles on GM and Chrysler that price will be a real bargain.

It'll be a long time before consumers have any confidence in the two even if GM and Chrysler survive.

[Riderfan_Lee]

Originally Posted by Riderz

Here is some reality. Obama's administration carried on with the bailouts even after Bush was healvily criticized for handing out bailout money. Obama doles out 16B then recommends GM go into bankruptcy in order to restructure. My neighbour bought a new 2500 with a "ChinaMax Diesel" and the sale is dated March 28 2009. Obamas govnt will honor GM warranty on vehicles with a sale date of March 30 2009, that leaves my neighbour out in the cold. Then GM vehicles will see initial depreciation of up to 50% in the first year, with all the uncertanty. They are done!!!!!!!!! Ford is the "New Number One" in North America!!!!!!!!!!!

Ummmm, I am assuming you are in Canada.....did you read my previous post. Canada has a law in place which forces companies to put away money that is not part of the liquidatable (word?) assets and is managed by the government in event of a company going completely bankrupt.

GM has some really good cars under their umbrella but they are way too big. If you look at how many cars Toyota produces versus GM. Ford is in the best shape right now because of a few select vehicles they make really well. IMO, bankruptcy will put GM and Chrysler in a better place in the long run than struggling the way they are right now.

[RIDERFAN04]

Originally Posted by Riderz

Here is some reality. Obama's administration carried on with the bailouts even after Bush was healvily criticized for handing out bailout money. Obama doles out 16B then recommends GM go into bankruptcy in order to restructure. My neighbour bought a new 2500 with a "ChinaMax Diesel" and the sale is dated March 28 2009. Obamas govnt will honor GM warranty on vehicles with a sale date of March 30 2009, that leaves my neighbour out in the cold. Then GM vehicles will see initial depreciation of up to 50% in the first year, with all the uncertanty. They are done!!!!!!!!! Ford is the "New Number One" in North America!!!!!!!!!!!

Funny name for the engine, haven't heard that one before. Lets hope RiderfanLee's post is correct than your neighbour and many others will be covered.

[Beels]

Originally Posted by Riderz

Here is some reality. Obama's administration carried on with the bailouts even after Bush was healvily criticized for handing out bailout money. Obama doles out 16B then recommends GM go into bankruptcy in order to restructure. My neighbour bought a new 2500 with a "ChinaMax Diesel" and the sale is dated March 28 2009. Obamas govnt will honor GM warranty on vehicles with a sale date of March 30 2009, that leaves my neighbour out in the cold. Then GM vehicles will see initial depreciation of up to 50% in the first year, with all the uncertanty. They are done!!!!!!!!! Ford is the "New Number One" in North America!!!!!!!!!!!

You know what's funny about that? Isuzu is a Japanese company to start with. The engines are built in Moraine, OH and in 2006, GM sold its share in Isuzu so they have no ties whatsoever.

[Riderz]

Originally Posted by Riderfan_Lee

Ummmm, I am assuming you are in Canada.....did you read my previous post. Canada has a law in place which forces companies to put away money that is not part of the liquidatable (word?) assets and is managed by the government in event of a company going completely bankrupt.

GM has some really good cars under their umbrella but they are way too big. If you look at how many cars Toyota produces versus GM. Ford is in the best shape right now because of a few select vehicles they make really well. IMO, bankruptcy will put GM and Chrysler in a better place in the long run than struggling the way they are right now.

I am living in the US, sorry I wasn't clear on that. But down here, any GM warranties are at risk for vehicles purchased prior to Mar 30 2009.

[Riderfan_Lee]

Originally Posted by Riderz

I am living in the US, sorry I wasn't clear on that. But down here, any GM warranties are at risk for vehicles purchased prior to Mar 30 2009.

Yeah, that is a kick in the balls for your friend then. Hopefully they don't file Chapter 7 then.............They would be stupid to void warranties if they file Chapter 11. That would effectively drive away most of their current customer base in an industry that is highly dependent on brand loyalty.

Last year GM announced they were going to focus on the Saturn line as their market strategy. Rebadging is not a bad way to go when the rest of your vehicles are considered junk.

That said, we have a 2003 Cavalier (wife's car) and it has been excellent. All three NA manufacturers are suffering more from the perception of the quality gap than the actual gap is today. People think back to the cars they owned in the 80s and 90s...before they bought their Hondas and Toyotas... Many people think that Hundais are junk...but they are actually pretty damn good vehicles these days.

[Riderfan_Lee]

Originally Posted by Rwilco

Last year GM announced they were going to focus on the Saturn line as their market strategy. Rebadging is not a bad way to go when the rest of your vehicles are considered junk.

That said, we have a 2003 Cavalier (wife's car) and it has been excellent. All three NA manufacturers are suffering more from the perception of the quality gap than the actual gap is today. People think back to the cars they owned in the 80s and 90s...before they bought their Hondas and Toyotas... Many people think that Hundais are junk...but they are actually pretty damn good vehicles these days.

The only problem with the rebadging is that to introduce the vehicle it has to be imported (from Europe) so they are losing money on every vehicle because NA won't pay 25-30K for a 'domestic' compact. They are selling them cheaper than what they cost. Overall, it was a bad time for them to introduce a vehicle like this but last year, most people were not envisioning a recession.

[GreenDawn]

I have a Saturn ION and absolutely love it. I have had Ford's, a couple of other GM line cars and an Elantra and I have to say out of all of my vehicles I have been the happiest with my Saturn. I will be very upset of that line goes under as I would prefer to stick with any Saturn product

[RIDERFAN04]

Originally Posted by Beels

You know what's funny about that? Isuzu is a Japanese company to start with. The engines are built in Moraine, OH and in 2006, GM sold its share in Isuzu so they have no ties whatsoever.

Interesting, did not know all of that history.

One GM Diesel I was looking forward to seeing is the 4.5L Diesel. This diesel was planned to be put into the 1/2 ton trucks, Suburban, Yukon, etc but recently was put off with all their financial issues.
The 4.5L was developed by GM in the US, hopefully we will see it introduced some day.