"Eisboch" wrote in message
...

It sure looks like GM may go down the tubes.
Their burn rate of available cash may not last until Obama takes office.

Sure does. Depends if the suppliers will wait on the hope to be paid or
not. Many business now have pay now terms which will accelerate the draw.

According to some analysts, Chapter 11, which keeps the creditors and
suppliers off their backs while they reorganize really isn't an option.
Who would buy a car from a company in bankruptcy? Furthermore, consumers
have pulled in their horns in terms of buying big ticket items in general
with concern of continued employment.

No one is buying them now. Lets assume a person would want a GM (Government
Motors) car. What with? Money the moddle class does not have? With credit
they are maxed out and can't get more? And that is assuming they can't get
a better deal with a different manufacturer.

There's a 25 billion dollar government "loan" available to the auto
industry in general that is intended to help them finance the development
of new, high efficiency vehicles. Bush has recommended expediting the
release of funds associated with this loan, but is against a further
"bailout" using funds from the recent 700 billion TARP plan.

At their burn rate, that will not last 6 months. Keep in mind they are
defering spending as much as they can.

GM's burn rate is 3.1 million per *hour* and as of the end of September,
they had about 16 billion in cash.

Yep.

Personally, I have very mixed feelings about this. A while back GM
dropped the Oldsmobile line due to poor sales and to cut costs. They also
hinted that another line .... either Buick or Pontiac .... would be on
the chopping block in the future if their financial situation didn't
change. That was a couple of years ago and nothing has been done.

I don't. There isn't room in the market for GM any more. Poor quality,
high cost, wrong product. If 3 are in the market for a shrinking demand,
one going down might actually help the other two.

Although it would be disastrous for the employees and suppliers for GM to
fold, I also can't see why the taxpayers should spend good money after
bad. The only way I personally could support a general bailout would be if
it were tied to a very specific and aggressive business plan laid out by
GM that would cut costs, simplify operations and overhead and otherwise
provide believable proof that the bailout money would not simply extend
their existence for a while longer while business goes on as usual. GM
had the opportunity to address their problems and have done very little to
save themselves. Their problems did not originate with September's market
meltdown.

GM isn't going to address the problems until they are forced to. GM has
been bleeding cash for a generation, if GM had kept it's promises to
customers, shareholders and other investors they wouldn't be discussed in
this light today.

And money sent to GM from the government is money wasted. Worse yet, you
are going to have every failing business model in the world looking for free
cash to continue their denial of incompetance and stave off the need for
change. A list of some others, Chrysler, Ford, (have to be fair now),
Honda, Toyota, Nissan, BMW, JCI, Magna, NorTel, Sun Microsystems, and an
enless list of losers.

What should happen is like Luecent, let the competition buy them out after
chapter 11. The market will correct if given a chance.

The other problem with bailing GM out is that it sets a precedent to
justify the bailout of any company experiencing financial problems. How
do you save a job here, but let an equally important job to someone else
in another company dissolve?

Eisboch

The precident should scare the iving Jesus out of any taxpayer. Every
company in the world is going to extort the US government, jobs go or give
me money. And with bank bailouts, the horse is already out of the barn.

What we are seeing in reality is debtors don't want to pay their bills and
it is undermining the currency and society. It is that simple. GM needs to
go down on principle at this point. There needs to be a message sent that
this is what going to happen to you if you are over your head in debt and
doing nothing about it for too long.

I would not loan others money in North America right now unless I had health
kidneys on deposit. As for 4%, the risk, inflation and taxes, it makes no
sense at all. That is why the governments have to fund banks somehow, no
one else will. But they can't do it without killing the capital markets as
the currency isn't worth jack crap if people don't promptly pay their debts.

2009 the currencies in Canada and the US are going to be squashed as
inflation digs in hard. In fact, it has already started.