More GM Troubles
GM stock has lost 14% of its value over the last month and the company now has a total value of one twelfth the value of Toyota (13.3 Billion vs 164 Billion) according to an article in the Detroit News. Bookkeeping errors have also hurt the company, making it appear to be in better shape than it actually was. Some are looking at the real possibility of a GM Bankruptcy in the next couple of years.
As the Detroit News reports: "We believe the odds GM management could be held accountable for accounting errors has gone up and this could accelerate a bankruptcy protection decision we think is inevitable," Banc of America's Ron Tadross said in a report Thursday. He said there is a 40 percent possibility that the company will file for bankruptcy in the next two years, up from 30 percent before Wednesday's disclosure.
I have been concerned about a GM bankruptcy for some time now. I do not consider it inevitable, but I do consider it to be very likely. The UAW has made a major concession in their health care, but I think they are going to have to make more concessions. The pay scale they have had for the last half century is no longer feasible, and in my opinion, very unwise. (This same article said that the concession had caused GM stock to rise 4% from its low a day earlier.)
The Detroit Free Press adds in its article on the matter, that there is the possibility that a corporate raider, and it specifically names Kirk Kerkorian, could buy out the company and wreak havoc in what he does. It also includes the simple yet true observation that a GM bankruptcy would seriously harm virtually everyone in Michigan.
One hopeful sign is that the UAW is finally beginning to wake up and smell the coffee. Unfortunately, there are a few, and possibly quite a large a number, who believe that this is nothing but a union busting ploy.
If we want to save our jobs, and not see the companies go bankrupt, or forced to go overseas, we the workers, as well as the management, executives and stockholders, are going to have to accept some changes. Its lose a lot or lose everything.
As the Detroit News reports: "We believe the odds GM management could be held accountable for accounting errors has gone up and this could accelerate a bankruptcy protection decision we think is inevitable," Banc of America's Ron Tadross said in a report Thursday. He said there is a 40 percent possibility that the company will file for bankruptcy in the next two years, up from 30 percent before Wednesday's disclosure.
I have been concerned about a GM bankruptcy for some time now. I do not consider it inevitable, but I do consider it to be very likely. The UAW has made a major concession in their health care, but I think they are going to have to make more concessions. The pay scale they have had for the last half century is no longer feasible, and in my opinion, very unwise. (This same article said that the concession had caused GM stock to rise 4% from its low a day earlier.)
The Detroit Free Press adds in its article on the matter, that there is the possibility that a corporate raider, and it specifically names Kirk Kerkorian, could buy out the company and wreak havoc in what he does. It also includes the simple yet true observation that a GM bankruptcy would seriously harm virtually everyone in Michigan.
One hopeful sign is that the UAW is finally beginning to wake up and smell the coffee. Unfortunately, there are a few, and possibly quite a large a number, who believe that this is nothing but a union busting ploy.
If we want to save our jobs, and not see the companies go bankrupt, or forced to go overseas, we the workers, as well as the management, executives and stockholders, are going to have to accept some changes. Its lose a lot or lose everything.
posted by shoprat at 11:25 PM
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