GM scenario

In most of the rest of the world the wealthy are buying mercedes, not
cadillacs or buicks, while the middle classes are buying Japanese or
Korean.

It appears that GM cannot make it.

GM makes most of its money in finance rather than cars.

Kerkorian has bought 8% giving him working control of the company.
Since he bought in precisely when GM was hemorraging, this suggests he
thinks he can turn it around or make money out of the cannibalized
pieces.

My guess is that GM will sell off its car manufacturing divisions,
perhaps to Japanese firms, and retain GMAC.

GM may go the way of Philip Morris and shift into other businesses.

GM was at 20 down from 60 last I looked. I see it as being in the same
position as the old AT&T was for years and years. Just a lame duck
takeover candidate.

I would appreciate other opinions. let's try to be civil this time.

the sarp
Post count: 1,000,972,001

Re: GM scenario

You know GM had such opportunities with its ownership of Directv and Ross
Perot's computer services company. It never worked out as GM sold the
former and spun off the latter.

--
Lubow
"sarp" <> wrote in message
news:
> In most of the rest of the world the wealthy are buying mercedes, not
> cadillacs or buicks, while the middle classes are buying Japanese or
> Korean.
>
> It appears that GM cannot make it.
>
> GM makes most of its money in finance rather than cars.
>
> Kerkorian has bought 8% giving him working control of the company.
> Since he bought in precisely when GM was hemorraging, this suggests he
> thinks he can turn it around or make money out of the cannibalized
> pieces.
>
> My guess is that GM will sell off its car manufacturing divisions,
> perhaps to Japanese firms, and retain GMAC.
>
> GM may go the way of Philip Morris and shift into other businesses.
>
> GM was at 20 down from 60 last I looked. I see it as being in the same
> position as the old AT&T was for years and years. Just a lame duck
> takeover candidate.
>
> I would appreciate other opinions. let's try to be civil this time.
>
> the sarp
> Post count: 1,000,972,001
>

Re: GM scenario

"Lubow" <> wrote in
news:69184$4412f3d2$44a68a53$:

> You know GM had such opportunities with its ownership of Directv and
> Ross Perot's computer services company. It never worked out as GM
> sold the former and spun off the latter.
>

here's a contributing factor:

% Held by Insiders: 0.11%
% Held by Institutions: 88.70%

insiders lost control of their own company

which left them at a perennial weakened bargaining position at labor
negotiation times. They were steamrolled by union threat of labor stoppage
so the benefits wages spiraled out of control.

the pendulum is swinging back

• GM Canada workers vote to accept job cuts:

UAW says not close to deal with Delphi, GM

• [$$] Delphi, GM Near Cost-Cutting Pact With UAW

Re: GM scenario

Lubow wrote:
> You know GM had such opportunities with its ownership of Directv and Ross
> Perot's computer services company. It never worked out as GM sold the
> former and spun off the latter.
>


So this would seem to confirm my sense about what GM will do in the
future, only this time they will sell off their car divisions.

I think at the most this will push the stock back up moderately in a
few years.

the sarp

Re: GM scenario

ausound wrote:
> "Lubow" <> wrote in
> news:69184$4412f3d2$44a68a53$:
>
> > You know GM had such opportunities with its ownership of Directv and
> > Ross Perot's computer services company. It never worked out as GM
> > sold the former and spun off the latter.
> >
>
> here's a contributing factor:
>
> % Held by Insiders: 0.11%
> % Held by Institutions: 88.70%
>
> insiders lost control of their own company
>
> which left them at a perennial weakened bargaining position at labor
> negotiation times. They were steamrolled by union threat of labor stoppa=
ge
> so the benefits wages spiraled out of control.
>
> the pendulum is swinging back
>
> =B7 GM Canada workers vote to accept job cuts:
>
> UAW says not close to deal with Delphi, GM
>
> =B7 [$$] Delphi, GM Near Cost-Cutting Pact With UAW


ausound:

Institutional owners often get in to large secure companies because
they are safe investments.

Peter Lynch says a stock will not go anywhere if it has majority
institutional ownership.

Since GM is now going down, this may mean we can expect the
institutions to start fleeing a sinking ship. Usually institutional
managers dump their losers in October, don't they? This suggests that
the time to buy would be in October and hopefully after GM sells off
underperforming divisions.

But isn't GM's real problem not its legacy and wage costs but that its
cars just are not selling compared to the Japanese and German?

Even after they reduce labor costs, they will not be able to change
that.

They might be able to revive their heavy industry if they move
manufacturing to India, China, or even Haiti.

I am also curious as to what Kerkorian's intentions are.

the sarp
Post Count 2,000,507,001

Re: GM scenario

Huh? Since when do the employees own a public company? The CEO, CFO,
COO, et al do not own the company.

GM died because the Board could not find good management and should
have been replaced by the real owners, the Institutions, but they are
not interested. So why should we be?

a
==

On Sat, 11 Mar 2006 18:31:25 GMT, ausound <> wrote:

>
>here's a contributing factor:
>
>% Held by Insiders: 0.11%
>% Held by Institutions: 88.70%
>
>insiders lost control of their own company

Re: GM scenario

arthur wrote:

> GM died because the Board could not find good management and should
> have been replaced by the real owners, the Institutions, but they are
> not interested. So why should we be?
>
> a
> ==

So, arthur, my good man, what do you think will happen with GM?

Bankruptcy, take-over?

Why did Kerkorian buy an 8% stake in a dying company? Now don't say
you don't care, just to avoid having to answer.

Put down that bottle of Colt 45 and deliver.

the sarp
Post Count 3,400,000

Re: GM scenario

"sarp" <> wrote in message
> So, arthur, my good man, what do you think will happen with GM?
>
> Bankruptcy, take-over?
>
> Why did Kerkorian buy an 8% stake in a dying company? Now don't say
> you don't care, just to avoid having to answer.
>
> Put down that bottle of Colt 45 and deliver.
>
> the sarp
> Post Count 3,400,000

I think that Arthur is not far off course.

I think they will eventually ask for bankruptcy protection, break their
union
contracts as far as they can, and try to restructure.

Restructure what? An unexciting line of vehicles with a history of
unaddressed
engine and body integrity problems? Run by the same lackluster management?

They may become a target for a takeover, much as Daimler Benz took over
Chrysler.

Re: GM scenario

Best idea would be to keep the finance unit, sell off or close the
manufacturing, buy cars overseas and rebadge them, go bankrupt to get
rid of pension obligations and become a financer and marketer of cars.

It's not that good cars cant be made in the USA, as witnessed by
Toyota, Nissan, Mercedes and BMW having plants here. It is that GM
always seemed to be run by Mr. Cleaver and Mr. Nixon where the best
idea they ever had was to have "big doors". The idea of really good,
small cars or even really good medium cars just never were executed
right. The Corvette and Hummer are the only cars of remark in the GM
lineup (and both are worth keeping).

Doubtful that GM will actually do what I propose. No one listens to me
anyway. Car mfg is old tech and there is a glut of it in the world.
Cars last 200k miles now, not 100k anyway so the idea of throwing away
the car after 7 years is out, they last 15 now. Also here come the
Chinese.....

Re: GM scenario

Try 3yrs. That is their history requiring constant body changes. The
idea that the car buying public is a bunch of fashion concentric
queers, queens, and princesses.

There was a time when a Chevy ran forever. ( or, so all believed )

a
==

On 12 Mar 2006 08:02:40 -0800, "Doug" <>
wrote:

>Cars last 200k miles now, not 100k anyway so the idea of throwing away
>the car after 7 years is out, they last 15 now. Also here come the
>Chinese.....