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GM: The End Is Nigh

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Dear General Motors (NYSE: GM  ) Shareholder,

We go way back. After all, I’ve been imploring you to dump your shares all the way down. But I’m not here to deliver an I-told-you-so, friend. I’m here to help you. So help me, GM shareholder. Help me help you.

It is time you swallow the hard truth: GM is almost certainly going to follow Chrysler into bankruptcy court. This means your shares will be worth nothing. This means you should sell. Now.

Today's news
As expected, GM announced this morning that it was unsuccessful in its efforts to persuade 90% of its bondholders to swap their GM debt for equity. Rather than swallow what they thought was a raw deal, bondholders opted to take their chances in bankruptcy court. Good luck with that, fellas.

What that means for shareholders
In what is the Understatement of the Day, GM simply can't meet its debt obligations. Between that and the company's epic operating losses, all that separates GM from bankruptcy court is either a temporary governmental bailout or a few yards of red tape. Odds are that GM will file for Chapter 11 by next week, at the latest.

Deus ex machina?
I mean, anything is possible. Let's assume the Obama administration waves a financial magic wand and keeps GM from being forced into bankruptcy: Shareholders still lose. Again, the best-case outcome for shareholders is their stake in a stripped-down GM is diluted 100 times over. But even that horrendous "best case" scenario is unlikely. No matter how you slice it, GM's shares are toast.

Yes, there's plenty of blame to go around: past CEOs, the UAW, competition from Japanese competitors Toyota (NYSE: TM  ) , Honda (NYSE: HMC  ) , Nissan (Nasdaq: NSANY  ) , etc.

But the time for finger pointing is long since past. General Motors is a dead man walking, and there's no excuse for continuing to hold these shares. This isn't a question of pride or patriotism, but prudence. Sell GM.

For related Foolishness:

Joe Magyer does not have any positions, long or short, in any of the companies mentioned in this article. You can view his holdings here. Nissan Motor is a Motley Fool Global Gains selection. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (55) | Recommend This Article (85)

Comments from our Foolish Readers

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  • Report this Comment On May 27, 2009, at 3:30 PM, CAPTAINWACK wrote:

    Wow! nobody saw this coming? The truth is, this has been known since November 2008 when the first billions of our tax dollars went to the GM bail out. So listen fools, this is how things went... billions in tax payer bail out monies were spent on paying off the current bond holders, which most of were institutional investors and big contributors to the Obama party boy club. Yes, your taxes went to pay off these GM loans all the while the top brass knew GM was sinking like a lead Camaro. So now Joe Blow tax payer is stuck with worthless notes from GM to the tune of 14 Billion.

    Yet my daughters elementary school is falling apart because there's no money to repair the building. So much for shovel ready. Obama's is just a con-man in a fancy suit, which we paid for.

  • Report this Comment On May 27, 2009, at 3:32 PM, kellogg9 wrote:

    And so it shall be. I think when you take everything into consideration GM going into bankruptcy is probably the best medicine that can happen for America. The company was and IS in need of retooling if it even thinks to compete and sell a single car under that brand. GM use to be the shining light of the auto industry but it got lazy and expected that it was too big to fail. It is sad for them to go but although i have held stock with them (and still hold a few shares right now as they tank) for me to see America become great again i think brankruptcy is a good thing in the end.

    R.I.P GM 2009


  • Report this Comment On May 27, 2009, at 4:35 PM, SteveTheInvestor wrote:

    You sound like a very bitter person CaptainWhack. I would guess that you have zero personal knowledge of who the bondholders were, how much they received and/or how much they contributed to the Obama campaign. In addition, keep in mind that this entire mess was set into motion well before Obama took office.

    GM ran itself into the ground, and perhaps no monies should have been spent trying to save it, but some chose to at least try. Failure of a company like GM affects many people beyond just bondholders. It employs thousands who in turn pay taxes to support local government, including schools.

    I've not owned GM stock for a long time because I felt they were taking the wrong road. Guess I was right. They got outflanked and outmaneuvered by Toyota and Honda, plain and simple. Sad but true. It's really too bad that the government loans were not enough to keep them afloat. Ah well...... maybe they will be able to survive after bankruptcy.

  • Report this Comment On May 27, 2009, at 4:55 PM, diesel3446 wrote:

    It is true that bond holders have, in the past, always been first in line, and have now been put at the back of the line?

    Also, the problem I have with GM is that the R&D they put into the Corvette, and Camaro, was substantial in camparison to sales. They have done a great job on the Corvette especially, but is that where you would have put your R& D dollars?


  • Report this Comment On May 27, 2009, at 5:02 PM, cwinters wrote:

    It is to bad we wasted the billions of dollars on this huge pig of a company. The government was wrong as they are in 100% of their actions in trying to save private enterprise. The system is designed to weed out failures Like GM. The unions hopefully will now understand they killed the beast and hopefully will go away as well. It is criminal how our elected officials acted with our money and they to should all be ousted from Congress. The Tahoe goes on the block tomorrow, Toyota here I come.

  • Report this Comment On May 27, 2009, at 5:10 PM, Forrest47 wrote:

    The government should never bail out any business; nothing is too big to fail. The history of government auto bail outs is numerous - British-Leland motor, fiat, Peugeot, Saab - all Failed! The government cannot even run the post office fiscally responsible. Obama has never even run a business. What are we thinking??????

  • Report this Comment On May 27, 2009, at 5:46 PM, TSIF wrote:

    Worthless, ZERO, I think not. Do some research on companies that went Chapter 11! I'll be buying like a FOOL before they shut the flood gates! If it don't pop back up on the PK, then I'll have some soveniers that will be worth a fortune some day.....I want paper copies of all my shares this time!

  • Report this Comment On May 27, 2009, at 5:47 PM, ktgunn wrote:

    I cannot for the life of me see that America can be the same without the auto industry, an industry that shaped and defined the American character and made the US great (along with steel). I actually think this portends a dire future for America as I cannot see what will replace this industry.

    I work for a high tech company. We hire guys out of associate degree programs and pay them about $20k per annum. These are the guys who would have gone into the steel or auto plants where they would have earned enough to buy a house, new car every few years, send a kid or two to college and save for a pension. You cannot get married and raise a family on $20k per year.

    The low wages for working people in America is what's driving the expansion of government. More and more people will rely on the government for pensions, health care and education as their own incomes are insufficient.

  • Report this Comment On May 27, 2009, at 5:47 PM, dbman5 wrote:

    I've been saying for 20 years that the US auto industry is doomed unless we break this "fad" that says all US cars are junk and almost any foreign car is a wonderful, high quality, machine.

    Unfortunately, I don't see that changing anytime soon.

    Think about it. If you bought a US car, how many of your friends would make fun of you or think there was something seriously wrong with you? Tell me that doesn't have any impact on most people. People in general will buy whatever is popular because they don't want their friends to think badly of them.

    Here are some facts: I and my family have owned many cars from US manufacturers. I nearly always buy new and I've never sold anything with less than 88,000 miles on it - and some have had over 150,000. One was sold at 133,000 miles and the new owner drove it back and forth almost every weekday 80 miles each way for 2 years. On top of all that, my "regular maintenance schedule" consists of "change the oil once in awhile when convenient" (usually twice or more the recommended mileage), check the brakes every once in awhile to see if the pads are wearing out, and fix other things if they break.

    Like the 133,000 mile car, some of my other cars have been sold to aquaintences and all have been very happy with them.

    American cars are junk. Yeah, right.

    Couldn't prove it by me.

  • Report this Comment On May 27, 2009, at 5:57 PM, Keal7 wrote:

    Somehow those with their own issues will work a swipe at Obama into why a GM that has been bleeding since their 1990s crisis and last bailout before last year and finally essentially failed in October when Bush completed an 8 year dismal stewardship of the economy and bailed them out or go down as the Truman-lite that ended America as a developed nation with a significant car industry.

    Then they'll decry how American jobs were lost and family dealerships are being closed later down the road to complete the have-it-both ways whine when they are let down to bankruptcy.

    BTW captainwacko, Obama has been personally making at least a million each year for years now beyond pay for senatorial work and is not wearing your miserly suits even if his job entitles him to usual remuneration his peers or other presidents have received in the past. As I've seen before, such trivial bitterness can only come from a certain depth of a failure soul and usually has little to do with the object or the topic.

  • Report this Comment On May 27, 2009, at 6:05 PM, omt68 wrote:

    All politics aside, one can count less than a handful of circumstanses where government bail out resulted in viable business five years out.

    If the businesses were viable in the first place, private capital would have been available.

    As for any business being too big to fail, the businesses were already too big! Should our anti trust laws not have been able to prevent businesses from being too big?

    I am personally much more afraid of the consequenses of the various government bail outs than of the consequenses of failing businesses.

  • Report this Comment On May 27, 2009, at 6:18 PM, sunithaya wrote:

    It is sad to see all the arm-chair economic wizards that point fingers at one of the most intelligent cabinet of any recent administration, which don't forget did not get us into this mess.

    The fault from my consumer point of view, is simply the mediocre quality (in comparison) of Detroit products.. They forgo efficiency and responsibility for design arrogance and this is the result.

    After having a VW for over 40 years (I gave it to an employee, who still has it), I decided to "buy American". I bought a Ford Explorer. I commuted every week from SF to Yosemite and one cross country trip, which apparently was too much, one day before the warranty expired the transmission blew in thousand pieces leaving me stranded at night in the sierra. I insisted and my next car was a Ford Contour which started failing days after it left the showroom. I moved to Florida and the weather was to much for that junk, the dashboard popped and could not get replaced and customer service simply did not exist. Maybe I am the only one who got a lemon?

    Now I own a Toyota Hybrid, thank you very much

  • Report this Comment On May 27, 2009, at 6:46 PM, xetn wrote:

    It is not the shareholders that are losing, it is the taxpayers that have to foot the bill for the existing bailout and any additional money our all-knowing government decides to throw down the rathole. Trying to save failing business is like eating lots of fat and trying to lose weight. GM should have gone bankrupt in the first place.

  • Report this Comment On May 27, 2009, at 6:46 PM, EBerg13 wrote:

    The saddest thingj about all of this is that nothing can rise from the ashes if the Phoenix (and the Camaro, etc., etc.) are not allowed to burn. I look at all the brilliantly new autos out there and think of old Chevy and Chrysler dealerships selling Smarter Cars (the Smart Cars are sorta dumb,really) and electric pod cars and plug in hybrids made by some company just in the start up phase right now. The big 3 have stifled competition and made cars no one wants to buy. I am still driving my 98 Corolla years after my daughter's Cavalier of the same age has been junked.

  • Report this Comment On May 27, 2009, at 6:49 PM, kdkaminsky wrote:

    I agree with omt68 and Keal7 is a knothead.

    ' I am personally much more afraid of the consequences of the various government bail outs than of the consequences of failing businesses.' Well put. All this leverage will result in high Inflation, high energy and food prices and a lower standard of living. When China stops buying our debt we will be in deep do-do and the resulting economic havoc will make the depression look like a mild recession. Wonderful is this change! Lets forget about the Constitution and economics and go commie.

    Most intelligent cabinet? They cannot even keep track of where the TARP funds have gone. Certainly the most dishonest with all the tax 'oversight'. Typical Demi (and I use to be one), do as I say, not as I do.

    My GMC is approaching 200K and runs like a top. All you have to do is the maintenance. My VW, meanwhile, cannot stay out of the shop.

  • Report this Comment On May 27, 2009, at 7:15 PM, mariposakait wrote:

    Where you went wrong, Sunithaya, is by buying a Ford. Your logic is flawed. Just because one American vehicle is bad doesn't mean they are all bad. (btw, how do you have enough power to tackle these hills with a hybrid? Or are you one of those that I get stuck behind on my way up and down the hill to Merced?)

    We have three(well, four if you count my husband's project car...'68 Chevelle), a 2003 Crewcab Dually Diesel, a 2004 4X4 and a 2006 HHR. ALL are wonderful vehicles. We've also had a Camaro and a Beretta(which I drove to 164K miles and sold to someone who didn't drive mountains all day, last I heard it was still going strong).

    Speaking of fuel mileage, my HHR gets 26/35-40, The smaller truck gets 16-26, and the diesel gets 15-25. Not bad for American. Better than hybrids advertise for the HHR.

    OTOH, our(4) kids all have 2006 Hyundai Elantras, which have turned out to be pieces of dung for the most part. Brakes need to be replaced frequently, bad trannies, headlights need replacing constantly, weird things just fall apart for no apparent reason. I'd stick with Chevies if they'd let us.

    I think that losing GM is a horrible death knoll for our country. Sad.

  • Report this Comment On May 27, 2009, at 7:33 PM, minnjim1 wrote:

    OK, I agree that GM is headed for bankruptcy. What I can't figure out is why GM stock is priced over a dollar at today's close. (I would think it would be selling for pennies.) Efficient market? Do the GM stockholders know something we don't? Or are they just holding on tightly as the big ship goes down?

  • Report this Comment On May 27, 2009, at 7:36 PM, FrankTX wrote:

    The government is committing to subsidizing the company throughout reorganization. With going-concern as the goal in the packaged-

    bankruptcy deal, the company could come out with significantly increased "intrinsic value". Given the overall scope and magnitude that GM operates within, a positive shift in going-concern value would

    push the stock price way up from where it is right now. Yes, the equity may be diluted in the short run... but GM could be easily valued at $10 in 24 to 48 months and looks like a real bargain.

    Remember, most analyst agree that the American Consumer has not

    learned anything from this crisis, and that as recovery begins to

    unfold... consumption will shoot through roof.

  • Report this Comment On May 27, 2009, at 8:05 PM, TravelingMel wrote:

    GM, you watched Toyota, Nissan and Honda all come to the USA. You saw how they built quality cars in USA manufacturing plants by good ole American workers.

    You saw the public demand innovation and they wanted quality. Now, you see the "other" American car manufacturers continue to thrive without TARP money.

    I hope one day your executives will take a field trip to see what the other American manufacturers do to keep costs under control and maintain their presence here in the USA.

    P.S. Why would the bond holders want GM stock when your own executives dumped it? Take this time to think.

  • Report this Comment On May 27, 2009, at 8:09 PM, matthunt97 wrote:

    To all the neigh sayers and pundits…… the top 10 ranked cars brands for dependability are as follows: 1. Jaguar and Buick 2. Lexus 3. Toyota 4. Mercury 5. Infiniti 6. Acura 7. Lincoln 8. Cadillac 9. Honda 10. Porsche (J.D. Powers and Associates, 2009). Well, so much for no dependable traditional American Brands. As for the intelligence of the cabinet……does intelligence equal performance and results? Maybe, it is very open end to find proof that would validate such a claim. Should we blame Bush? Maybe, but exactly when did the current economic problems start? Day? Hour? Minute? I say it is an accumulation of factors, many of which are beyond any legislative or executive governmental bodies control. With many factors being compounded over time with unpredictable results, thus have fun flapping thy gums, throwing blame around, and in general presenting no viable solutions.

  • Report this Comment On May 27, 2009, at 8:59 PM, cbhb1694 wrote:

    I am tired about hearing how wonderful the foreign car manufactures' product line is. I owned a foreign car 1 time and couldn't wait to get rid of it. The repair bills were outrageous! I have always owned a GM Car since and had very few complaints about the products. The Unions in Michigan have pushed too far. Skilled trade workers were being punched in by fellow workers through the job bank to do nothing for years. My brother retired from GM recently but I recall the first week on the job that a fellow worker was having trouble with a machine on his line so he went to assist & was threatened by the Union with being fired for doing so. Then, of course, theirs the CEO Greed and descrepency in their value vs. their pay, bonuses, etc.

    Michigan has been devastated by the loss of jobs in the auto and auto related industry and I fear the worst is yet to come. What does the govenor of this state do? She continually tries to find ways to RAISE taxes to drive away all the businesses that are left..My comment about her is to ship her A..back to Canada. REAL LEADERSHIP IN THIS STATE AND IN THE FEDERAL GOVERNMENT WILL COME WHEN ALL OUR SO CALLED LEADERS FEEL THE HURT LIKE THE REST OF US!!! Let's start with reducing government benefits, reducing their incomes by 40-50% like the rest of us. FRANKLY WE THE PEOPLE CAN'T AFFORD OUR GOVERNMENT!!!!! The decoupling in our economy needs to take place here immediately!

  • Report this Comment On May 27, 2009, at 9:59 PM, nopcmerde wrote:

    As to the fellow who criticized Jennifer Granholm, hey she's a Democrat and can't do anything that would offend the union bosses. The people of this state chose not to elect the fellow who ran against her last time. He runs a successful MI business (Amway) and, well, as the Democrat ads put it, his evil company built some Amway plants in Asia to supply Amway products to people in Asia so they could afford to buy them instead of making the products in MI Amway plants at costs that those people could not afford to pay. Rotten Republican. In other words, the majority of voters in this state got the incompetent and ineffective governor they voted for and deserve when they had the option of someone who actually new what the heck they were doing.

    It is a huge shame about GM because they are finally making very good products like Caddy's and the Opel designed Malibu (and other models) and even the Aussie G8. These are not merely appliances, but very nice cars...competitive with anything else. They still do not have a very good small car, but supposedly the Cobalt replacement will be it.

    I always wondered why GM did not sweat the details. I had a 2000 Yukon XL and, while a gas hog, it was basically a good vehicle of its type. But crazy things happened at a young age to it, like the rear defogger tab coming off the rear window (untouched) and requiring a new rear window to fix ($800). The exterior mirror defogger element failing. The fuel pump in the fuel tank failing at under 30,000 miles (out of warranty, of course) and costing $500 to replace. Bunch of other stuff that had no business happening for a vehicle under 5 years old. Our $40,000 Corvette had carpetting, fiber-board panels, and interior materials that belonged on a $12,000 Hyundai. I always suspected that GM was using cheap parts because they had to make up for the fact that their labor (current and retired) costs were so enormous that they could not afford to buy good, long-lsting parts or the vehicle cost would go through the roof. Either that or the bean-counters really were in charge and were driving the company into the ground. I dunno. Sad, though. I guess my GM credit card rebate bucks will go down the toilet now. Just as well: I will never buy a GM car as long as Comrade Obama runs the company.

  • Report this Comment On May 27, 2009, at 10:22 PM, jbromet wrote:

    My only regret about GM's demise is that we've now lost almost all of our productive capabilities in the USA. Next time we need a tank or an airplane in wartime we'll have to ask China to make us one. Yah like that's going to happen! What is sad about this matter is that the UAW did nothing to save the company out of greed. They killed the golden goose. Very nice! GM executives did nothing to help their own case. They just let the baby die. It's the country that will pay for this in taxes and national security. Well, it wasn't as if GM wasn't warned about this years ago.

  • Report this Comment On May 27, 2009, at 10:40 PM, HarryCaraysGhost wrote:

    Correct me if I'm wrong, but did'nt the whole deal blow up because the bond holders would'nt come to terms.

    My understanding is the majority of bonds were held by hedge fund managers, and they took out insurance on the bonds though aig.

    As an American I deplore these practices

    As an investor you have to admire it.

    I could be way off base since I don't follow auto,air or financial sectors.

  • Report this Comment On May 27, 2009, at 11:41 PM, budertv wrote:

    Blaming Bush for the current economic conditions is like blaming Noah for the flood. Any fool knows the rules for lending were changed. Banks could no longer refuse to make loans using the old rules or underwriting. This opened the flood gates and admittedly many banks went to the far side and began making crazy loans. Not to worry, Fanny and Freddy will buy them. Not to worry, we can securitize them and sell them to investors. Not to worry, AIG, etc. will insure them. Whoa, wait a minute, the buck stops somewhere. Whoa, wait a minute, foreclosures are causing massive losses for whoever ended up owning the massively securitized "PIG" loans.

    The biggest problem was the government forcing banks to change their underwriting standards followed by the greed that swallowed up lenders and investors. Funny thing, just a few years before the mortgage meltdown we had a vehicle loan meltdown. Now, if you want to place blame for the current state of the US economy, then blame congress, individual greed and corporate greed (which is actually extended individual greed).

    Back to the issue at hand, the looming bankruptancy of GM. A very sad day is coming soon and that day will set off a series of disastrous events that will further cripple our reeling economy. Other companies, tightly coupled with GM, will suffer even more than they already have and some of them also will go into bankruptcy. Many more people will lose their jobs and the effects will domino throughout the country. Shame on all of you who have taken a cavalier attitude toward this dark day in US manufacturing history. And yes, there are many places to lay the blame for GM's downfall. I place the largest share of the blame on the American consumer who decided that GM no longer deserved his business. This is, in many cases, the same consumer who decided that US companies no longer deserved his business when he could buy something made in China for half the cost or less. It doesn't matter that those purchases last a fourth, or less, as long. Or does it ? Think back to those days when the Japanese were gobbling up pieces of America. That will be nothing compared to that which is coming when all of our dollars end up in China and when the interest rates rise and we have to pay more normal rates to the Chinese who buy our T-bills and T-bonds. The writing is on the wall. The day of reckoning is coming. Deficit spending and trade deficits can only continue so long. It's very similar to credit card spending. If you overdo it for too long, the day will come when your salary will not even cover the interest on your balances. America is headed for the poorhouse. Unless, we change our ways.

  • Report this Comment On May 28, 2009, at 12:08 AM, sb101cu wrote:

    " The rich rules over the poor, and the borrower becomes the lender's slave". Prov. 7:22.

    Guess who is the slave and who is the lender

    And the debt clock says, "Time to kiss your future goodbye" NEW YORK - In a sign of the times, the National Debt Clock in New York City has run out of digits to record the growing figure. As a short-term fix, the digital dollar sign on the billboard-style clock near Times Square has been switched to a figure — the "1" in $10 trillion.

  • Report this Comment On May 28, 2009, at 12:11 AM, sb101cu wrote:

    See the movie, where the bi-partisan law makers and bankers have given the prognosis if not the diagnosis of things to come. Wait till 2040, when the social security and medicare goes bust.

    The financial crisis of today,in USA,is just the TIP of the iceberg. It is an irony, that the family unit (in USA) over the last three decade has gone SMALLER and the houses have gone BIGGER. Something to think about...Is it the ego...

  • Report this Comment On May 28, 2009, at 12:20 AM, tireman63 wrote:

    You folks that want to blame the bondholders--just remember that many of the bonds were bought by working stiffs like me--we wanted security and relied on the GM name. It is a rule of law that secured creditors are first in line in bankruptcy. Obama (yo mamma) wants to change all that and give the unions the lions share. When a rule of law is broken to satisfy political pressure, we are all in big trouble.

  • Report this Comment On May 28, 2009, at 12:36 AM, FLORIEPOWER wrote:


  • Report this Comment On May 28, 2009, at 12:53 AM, starbucks4ever wrote:

    We have bankrupted Chrysler, and seem to be in a better shape than before. GM is no different.

  • Report this Comment On May 28, 2009, at 1:27 AM, HarryCaraysGhost wrote:

    I drive a G.M and always will.

    That still doe;st give me an answer to the bonds.

  • Report this Comment On May 28, 2009, at 3:15 AM, work4ever wrote:

    OK, maybe this will incite a riot but here goes. A word of advice to the CEO of GM and for that matter all the BIG THREE, GET RID OF ALL, AND I MEAN ALL THE "GIMME, GIMME, GIMME" UAW UNION WORKERS AND RETURN THESE GREAT COMPANIES TO PROFITABILITY!!!!!!!!!!!! When was the last time you were standing next to a union worker (OF ANY KIND) and didn't hear GIANT SUCKING SOUNDS??????????? Answer that one you fools!!!!!!!!!! GM CEO, I hope you read this!!!!!!!!!!!

  • Report this Comment On May 28, 2009, at 5:12 AM, Ibeatmykids wrote:

    I agree so much! Unions drove these companies into the ground. A 30k GM vehicle seems more like a 15-20K Japanese vehicle. The reason being that it costs an arm and a leg for GM to produce such a shitty car due to outrageous labor expenses.

    Some uneducated laborer does nothing but tighten

    lugnuts all day and gets paid $35 an hour with full health coverage and retirement. Get outta here! GM had to have seen this coming for years.

  • Report this Comment On May 28, 2009, at 7:41 AM, madinga wrote:

    What about that electric car they had rolling for a while? You had to be a short sighted fool to throw that rare pearl away!

  • Report this Comment On May 28, 2009, at 8:06 AM, CAPTAINWACK wrote:

    Hi Steve, good to here from you. Yes, I'm bitter and you should be too. It's us and the younger generation of tax payers that will be stuck paying for Obama's blank checks to GM and the big C.

    GM has 64 billion in debt which they couldn't afford to pay, so our Washington know-it-alls give them 15 billion to keep there loan payments current. So why in the world would anybody give them more money when there debt to income ratio is 3 to 1?

    When they file for bankruptcy the tax payers will maybe get 5 cents on the dollar. And don't forget that this bailout money was bonded, which the tax payers are now stuck with no matter what ever happens at GM or C. Now add interest to this 15 billion and guess what? The tax payers are stuck with a 20+ billion dollar bill. For what?

    So when GM and C were riding the good times they should have paid off this debt, but instead they just kept digging deeper. Everybody saw this, but Obama still gave them a free ride clearly knowing that the end was near.

    A local Chevy dealership here in CT has already closed it's doors and laid off 75 people. As for all the people who think these bailouts are working, just wait until you get the bill.

  • Report this Comment On May 28, 2009, at 8:23 AM, oliveoylxy wrote:

    In August of 2005, I bought a Cadillac STS-4. I could not purchase what I wanted in Canada. So, I scratched my head and determined that Cadillac's would be sold in Belleview, Washington; headquarters of Microsoft.

    It cost about $100,000.00, and I have been very satisfied with it except for the fact that the car is smarter than me. I assme that all of the features of this amazing vehicle will eventually trickle down to Chevrolets and lessor models.

    I am not in favor of government bailouts. Vehicles, such as the Cadillac STS-4, will always have a place in the market.

    I lost about $40,000 on my GM stock. I sold at about $6.00 per share.

  • Report this Comment On May 28, 2009, at 8:28 AM, wheelen15 wrote:

    It's fashionable for the know it all's (know nothing's), to blame the unions for the demise of industrial America. Organized labor started it's decline when Reagan "busted" the air traffic controllers back in early eighties. Since then, business and political leadership has taken America's industrial and economic infrastructure, and distributed it throughout

    a number of countries overseas. And what is the result? Business execs and political leaders made plenty of money, good jobs disappeared overseas, and America's economy???? Organized labor would have helped prevent our present state.


  • Report this Comment On May 28, 2009, at 8:37 AM, Ibeatmykids wrote:

    I am ready for them to go ahead a file for bankruptcy. the sooner they file the sooner it is over with and the sooner we can move foward.

  • Report this Comment On May 28, 2009, at 9:53 AM, JGBFool wrote:

    Jaguar got the highest "dependability" ranking for 2009?

    Weird. I guess they decided they would build good cars in '06 just to get out of the cellar for once.

    I'll stick with my Toyota, though.

  • Report this Comment On May 28, 2009, at 11:50 AM, cubanocabron wrote:

    The bankrupcy of GM and Chrysler is a perfect example of how UNIONS are never good for bussiness.

  • Report this Comment On May 28, 2009, at 1:39 PM, mikecart1 wrote:

    I feel sorry for neither the workers at GM, the owners of GM cars, or the shareholders of GM. You can't do much worse as far as companies go. ANYONE with ANY car knowledge has known this since early 2000's and even the 1990s. GM is a total disaster of a company. Forget about them trashing their electric car. Their entire line of cars are garbage. They have 0 upside. There is not 1 single car I would want to be seen with and the only time I have driven GM is for rental cars when their entire lot is full of Chevy's and GMC's.

    If you work at GM, you should of quit long ago.

    If you own a GM, you obviously are too patriotic to know better or just too dumb to realize you are driving around in a poorly made machine that is designed to FAIL.

    If you own GM stock - still, then you should get your head examined or be shown through the front doors of the closest casino.


  • Report this Comment On May 28, 2009, at 3:41 PM, robpotter wrote:

    Given the state of U.S. economy, trade deficit, and energy dependence, I hope that all capitalists and other stakeholders in the auto industry take maximal advantage of present opportunities to leverage assets, redeploy resources, invest in new capabilities that enhance our long-term global competitive position through synergies among many related industries - not only within automotive but also manufacturing, energy production, and transportation more generally.

  • Report this Comment On May 28, 2009, at 4:30 PM, KKnese wrote:

    There is a bright side to this, especially if you're properly diversified. It's called the 1099X. Take the losses on your GM stock and net them against your capital gains. Even if you were STUPID (un-foolish) enough to put all your investments into GM, you can still deduct $3,000 in losses per year against regular income until the whole loss has been deducted. You will lose the interest, though.

  • Report this Comment On May 28, 2009, at 4:33 PM, TMFJoeInvestor wrote:

    Hey Folks,

    Just as an update, there is new-news on this story:



  • Report this Comment On May 28, 2009, at 4:53 PM, Ironbob wrote:

    Look at all the little Obama sychophants come out of the woodwork! Guess what? No one gives a rat's rear end who "got us into this mess" because anyone who ever has worked for GM knows that the union would bust it sooner or later.

    So what's the answer? Why one ripped right out Das Capital of course! Turn it over to the government who then in turn will turn it over to the union. Anyone who wants to know how unions work as business managers only need to look at United Airlines which is an unmitigated disaster for a company.

  • Report this Comment On May 28, 2009, at 8:43 PM, done4nau wrote:

    Many of you must be very, very young. Review your history books. In the 50s when Eisenhower (rep) was president he did all he could to help unions. Why? because healthy unions kept the economy healthy. Bubble up economics keeps everyone able to buy and that gives a healthy economy. We stayed healthy until very foolish and greedy CEOs decided that they needed to be paid 200 times more than their American workers and needed big bonuses to be happy.

    Then the managers decided they could save money by outsourcing the work to Asia and by not hiring union people by using temps instead. That was part of Reganomics. You are blaming the wrong people. I agree that some union officials used poor judgement, but in light of what the CEOs and management were doing it was small potatoes. Reagan broke the unions and we've been on a downward financial spiral in this country since.

    Now there are rich, greedy people and hanging on by their fingernails people. I , for one, am ready to see the poor revolt and get rid of the cakeeaters (for those of you who have no historical base, this refers to Marie Antoinette's foolish remark "let them eat cake if they have no bread")

  • Report this Comment On May 29, 2009, at 12:51 AM, PoundMutt wrote:

    Lots of ignorant rants preceding (too many to go into!) So a few comments follow:

    Explain the 40% or so decline in Honda and Toyota sales (comparable to Big Three sales declines) if their vehicles are so much better than the US Big Three.

    I bought a NEW 2001 Honda Accord that came complete with 4 cosmetic defects (repaired under warrantee) AND a POSSIBLY defective transmission. OK, Honda DID extend the warrantee on the tranny to 100,000 miles and DID replace it when it finally tanked. I still have the Honda (78,000 miles) but it has been making funny noises coming from the front wheel drive train since ABOUT 40,000 miles. Nobody from Honda can explain it.

    If there were no unions most of you people would be making $30 per month for 10-12 hour days in 6 day weeks! Don't get me wrong, unions in my experience have WAY too much power, but they are a necessary evil. The UAW has made VERY large concessions recently that will bring labor costs down to the level of the foreign owned auto plants in the US.

  • Report this Comment On May 29, 2009, at 1:50 AM, theHedgehog wrote:

    done4nau wrote: for those of you who have no historical base, this refers to Marie Antoinette's foolish remark "let them eat cake if they have no bread"

    Yes, but, do YOU know what cake is?

  • Report this Comment On May 29, 2009, at 1:55 AM, Racovius wrote:

    "That them there Chinese or Vietnamese cars aint sheet, who in tarnation would buy a car with dang darn funny sounding names like Zukuki, Porch and Feeayt."

  • Report this Comment On May 29, 2009, at 4:29 AM, madinga wrote:

    Great article about how GM losts its way...poor leadership making bad decisions over a long period of time!

  • Report this Comment On May 29, 2009, at 3:56 PM, ashboy54 wrote:

    Does anyone remember when Bush and the boys wanted to convert Social Security into personal retirement accounts funded by the stock market for everyone? God that seems so hilarious (and either incredibly stupid or cruelly cynical) now.

    The Market is like the playing the ponies; a small group of insiders know who's going to win, place and show, and the rest of us are all armchair experts betting in the dark and spitting in the wind.

    We may go broke but we'll never run out of bs.

  • Report this Comment On May 29, 2009, at 10:13 PM, violet53 wrote:

    I agree with dbman5. It's been the fad for several years now for Americans to buy foreign makes or else risk ridicule or contempt from others as if somehow American brands were beneath them and not the "in" thing to do. It's the "keeping up with the Jones'" concept. I believe that GM did have problems in the '80's, but started to clean up their act in the '90's and beyond, however, they were never able to get beyond the reputation that they made inferior cars. I've always owned American cars, mostly GM. I think it's the right thing to do, and other than a lemon in '83, I've had no problems with any. I currently own a Chev. Malibu and haven't had to take it in for repairs once in the 4 years I've had it. My sons each drive '06 Chev. Trailblazers, my mom a '05 Chev. Uplander, and my husband an '02 Chev. Prizm. So far, no problems with any of them. I have no complaints. Some of us need to change our arrogant attitudes towards not only American cars, but American-made products in general. We are our own worst enemies.

  • Report this Comment On May 29, 2009, at 10:53 PM, bigcat1969 wrote:

    In something like a free market companies generally make their own beds and then are forced to lie in them. Chrysler has made poor cars for as long as I can remember reading auto reports. GM was sporadically average, but in a world where Toyota became the benchmark for quality all too often all GM had was a "Buy American" slogan.

    If you make enough poor products and burn enough customers, eventually you will have very few repeat customers and business will suffer. Also all your poor products are an advertisement not to buy your products in a high viability biz like the automotive world.

    Of course GM has satisfied customers as we can see from the posts above, but while a small stream of very loyal customers might work for Jaguar or even BMW it cannot sustain a company like GM. This bring up the real question, can GM survive post bankruptcy without continued government assistance? There will be an early upward movement based on loyalty to the country and government purchases, but will the average guy on the street buy a Government Motors car over Toyota or Ford?

  • Report this Comment On May 31, 2009, at 12:04 AM, jbromet wrote:

    Any Californian knows who runs Sacramento, the unions. Our esteemed representatives in Sacramento are BPF: "Bought and Paid For" because they receive money for political campaigns from the unions who in turn expect favorable legislation, citizens be damned! None of the politicians respond to the citizenry. Why? because they don't need them. The districts are fixed and safe, the money comes from special interest unions. What do the politicians need the people for? Is this still a mystery in California? Is it any different in Washington? Duh!

  • Report this Comment On June 01, 2009, at 9:00 AM, JaneBond wrote:

    You left out the devil in the details, namely how Chery, Maurice Strong, George Soros, and Israel will benefit from all of this.

    You are just now telling people to sell GM.

    Hedge funds were dumping this stock onto retail mutual fund holders, months ago, along with Ford, Chrysler, and most of the banks that are now government run, in addition to Fannie Mae and Mack.

    I saw what they were doing and pulled our company's pension fund into cash and took away its direction from Wallstreet gurus.

    The crooks are now at the helm, but even more distressing are the idealogues manipulating this supposedly free market.

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