What is going to happen with GM?

nemke said: "I want to ask my friends in the US what you guys think will happen with GM? Can the company rally back or are they doomed?"

ShortTrader said: "Gm is having trouble with profits right now due to outrageous health care and pension costs, but they did $193 billion last year in revenues, so with a good buisness plan they are not lost yet. Right now, they are downsizing and cutting costs. Chevrolet and Caddilac are the only two that will carry a full line-up. Buick, Pontiac, & GMC are supposed to only have 4 models each to cater to niche markets. Saturn is going up-scale, and I'm not sure about Saab. GM has a few options, 1. Use their $50 bil cash to buy-out some of their pensions, creating more profit per vehicle. 2. Move over-seas, $1 a day labor creates more profit per vehicle. 3. File chapter 11 (ouch for all us Americans), out of the 1.1 million people GM has on their payroll, they only have 375,000 employees, so 1,100,000 -375,000=725,000 retirees S-O-L, you can take a wild guess at gets to pick up that bill :eek: . 4. Go out of business (ouch for all us Americans), 1.1 million people S-O-L, take another guess at who gets to pick up the bill :eek: . Globalization is a Mothereffer :mad: . Also, GM got caught flat footed on the hybrids, they are investing their money into Hydregen Fuel-Cell Vehicles. They are saying Hydrogen for consumer use by 2010, but that remains to be seen, the Government is telling them to wait till 2015 to 2020 but they have invested billions and want to see some return. So to answer you question of what will happen? I don't know."

nemke said: "Do you guys think its going to rally back? Would it be a good idea to invest in it now... I mean is it going to be recovering any time soon (not 2015)?"

HappyHarry said: "I'd have to say no. I don't like the prospects of the auto industry at all."

AlfredSokol said: "They have to build higher margins in their cars. They sell them for too low-cost. So they need to either raise prices (doubt it) or lower costs. With the giant base of pensioners, they have really high fixed costs."

travllr said: "5/6/2005 7:50 (Memorable Commentary) Lately, it seems that GM spends almost as much time tying its problems to rising health-care costs as it does to foreign competition, rising gas prices or changing consumer tastes. [url]http://www.investing-news.com/artman/publish/article_819.shtml[/url] Interesting minimization of health care angle. trav"

StockFreak said: "Maybe we should be increasing our health care positions. UNH looks good next week, they had a good pullback last week."

Heather said: "UNH is a fine pick. They are a major player in the health care field. As far as GM goes, they are having a number of problems right now. Even though they reported record sales, they had to give big discounts and financing to boost them. The last time I checked they were even giving rebates on top of the employee discount. Seems like a lot of profit had to have been shaved off that way. They also make a lot of big trucks that use a lot of gas. That can't help them much. Nobody wants to pay 100.00 to fuel up every time they go to the gas station.(or at least not me.) Gas prices here did fall about 20 cents a gallon this weekend..still over 2.00."

Darren said: "i love unh...its like money in the bank"

Heather said: "All 3 auto makers are kinda in hot water. Check out this [URL=http://news.yahoo.com/s/afp/20050725/ts_alt_afp/usautooutlook_050725144905]read[/URL] It is summarized with this quote: Regardless of the outcome of talks with the union, GM faces a long road back to profitability, said Brian Johnson, analyst for Sanford Bernstein. "The market is looking ahead to next year and hoping for good news then," he said. "The fourth quarter may firm up some, but not enough to increase profitability much.""