How long before GM files for bankruptcy?

[Freak]

GM's bonds are basically at "junk" status. If they are officially downgraded to the junk category, GM will have to pay higher interest on its bonds.
A "junk" rating also would shut out many investors whose mutual funds have policies against investing in junk bonds.
I can't decide if it is going to happen in 05 or 06 and will the gov give them a bail out?

[Dr. Eagle]

GM's bonds are basically at "junk" status. If they are officially downgraded to the junk category, GM will have to pay higher interest on its bonds.
A "junk" rating also would shut out many investors whose mutual funds have policies against investing in junk bonds.
I can't decide if it is going to happen in 05 or 06 and will the gov give them a bail out?
Certainly Kaleeforkneeah won't, the state's bonds aren't much above junk bond status. Although Arnie does love his hummer... :wink:
Who knows, Geedub might give them a Lee Iacoca kind of package... never know.

[MagicMtnDan]

GM's bonds are basically at "junk" status. If they are officially downgraded to the junk category, GM will have to pay higher interest on its bonds.
A "junk" rating also would shut out many investors whose mutual funds have policies against investing in junk bonds.
I can't decide if it is going to happen in 05 or 06 and will the gov give them a bail out?
Don't give up your day job to do financial analysis. :D GM may be hurting but they're not declaring BK. :hammerhea

[cjordan]

GM's gone in the next 5-7yrs unless they change their cost structure dramatically. They'll limp along until then by selling off divisions, shutting plants, layoffs, etc. The company is basically a highly leveraged mutual fund that happens to have a car company attached. :wink:

[Dr. Eagle]

So you're saying they're DOOOOOOOOOOMED???????

[Tom Brown]

I hope they haven't factored my new truck purchase into their receivables. I have a lot of respect for their truck drive trains but living with the current body styles wouldn't be my preference.

[Dr. Eagle]

I hope they haven't factored my new truck purchase into their receivables. I have a lot of respect for their truck drive trains but living with the current body styles wouldn't be my preference.
Why not get yourself the Avrocar...
http://www.virtuallystrange.net/ufo/mufonontario/avro/avro5.jpg

[Tom Brown]

Why not get yourself the Avrocar...
http://www.virtuallystrange.net/ufo/mufonontario/avro/avro5.jpg
"...so revolutionary that it would make all other forms of supersonic aircraft obsolete."
:cool:

[Dr. Eagle]

"...so revolutionary that it would make all other forms of supersonic aircraft obsolete."
:cool:
And made in Canada... :idea:

[Back Forty]

I grew up in a GM family but have had the misfortune of seeing this company F*CK itself year after year. It hasn't been a leader in years and now when Americana is #1 GM can't even do that right..? Good bye camero, firebird hello something called GTO...? It looks like a G*D DAM cavilere(spelling..?) and gets terrible ratings.. Then they spit out some under performing ugly ass "truck" thing...? Oldsmobile is long gone thanks to these assholes. Who will be next? Pontiac, Buick (A kick ass division)..? Maybe they'll start a new division ala saturn cousin before they F*ck another division.. :lightsabe A sore subject.
They can't even produce a diesel suburban... I don't care what anybody say's even the GM trucks are weak. I love the big three diesel truck offerings all of them but GM has been upside down for so long I find it hard to believe they will ever be anything of worth again. Second Rate company. Toyota is superior all day to this worthless company.
Does anybody remember the amber turn signal lens craze by GM back around 2000..? I swear they were producing the ugliest sh*t box cars since the early '80s. The malibu... The delta 88..? I think they were trying to force some sort of Euro standard on us or something. Those amber turn signals dissapeared FAST... Even the GM trucks had them. DUMASSES. NOT NOW Gone as fast as they arrived.
I never cared for Ford or Dodge but now it's Dodge all of the way. Anybody here have the fine opportunity to put one of these new Hemi wagons through a 90* turn in a drift yet...? I'll tell you that they come out screaming. I rode the rev limiter and parleyed third gear(although I hate the stupid shifter) on the outside of the turn. WAHOO !WOW a modern wagon... rear wheel drive... 348 cube hot little V8...!!! YA SURE YA BETCHA...
I now have a Dodge diesel one ton dually 4x4. I'll never go back to GM at this rate. Life is good and I feel like I can trust the krauts with my new favorite American car company. Ford is kicking ass too with the trucks and that new mustang. Hell they never got rid of the full size rear wheel drive stuff. GM sucks... right now... :hammerhea

[Freak]

Don't give up your day job to do financial analysis. :D GM may be hurting but they're not declaring BK. :hammerhea
Let's take a look..cause I doubt you have.
GM has $300 billion in debt http://finance.yahoo.com/q/ks?s=GM
...and has a market cap, now, of $16 billion. See the problem there? The bondholders could buy the company nearly 20 times over if they used their money to buy stock instead of loan it to the company. The implication is clear--that GM is headed towards bankruptcy, and will default on the bondholders, who will then own a company worth less than $16 billion dollars.
For every one point that interest rates rise, refinancing GM's debt will cost an additional $3 billion in annual interest payments -- money that they clearly do not have. Where is GM going to get another $3 to $6 to $9 billion as interest rates rise by 1%, 2%, and 3% more? Selling autos?
GM will soon be a $300 billion dollar blow-up.

[Lake Ape]

Check out the wall street journal today on the front page upper left hand side, it's about GM and a company overhaul!

[Freak]

I read it. I don't think it will save GM. Course I could be wrong. :wink:

[gnarley]

I was recently talking to my dad about this. He is a retired middle manager. We better all hope they don't go belly up! They are in the process of restructuring, though we may not be hearing much about it. My dad also said that the largest costs to GM are Medical coverage’s. GM must make $1,000.00 per vehicle to pay for medical benefits for its employee's. Medical coverage is killing corporate America and sucking profits out of them and all of us.
There is an old saying: As GM goes, so goes the country. And if you stop to think about it, it is very true. So if GM is not making and selling that means people are not looking and buying. And that affects the entire economy, not just GM. When I was still working GM used to figure that for every person we had working that “one” person directly related to “ten” people in the community. So if 100 got laid off then 1000 non-GM people would also lose their job.

[cjordan]

Let's take a look..cause I doubt you have.
GM has $300 billion in debt http://finance.yahoo.com/q/ks?s=GM
...and has a market cap, now, of $16 billion. See the problem there? The bondholders could buy the company nearly 20 times over if they used their money to buy stock instead of loan it to the company. The implication is clear--that GM is headed towards bankruptcy, and will default on the bondholders, who will then own a company worth less than $16 billion dollars.
For every one point that interest rates rise, refinancing GM's debt will cost an additional $3 billion in annual interest payments -- money that they clearly do not have. Where is GM going to get another $3 to $6 to $9 billion as interest rates rise by 1%, 2%, and 3% more? Selling autos?
GM will soon be a $300 billion dollar blow-up.
Freak, your facts are correct but you have to remember that the bulk of the debt is on the finance co side, GMAC. GMAC runs whats known as a "matched book" so the a good portion of the debt outstanding is asset backed paper with the automobiles they sell (not to mention homes, etc) being the collateral. So in a nutshell the debt on the finance company side is being supported by the consumers as they send in their monthly car/truck/home payments and not everyone gets 0%, in fact most don't. Industrail debt (operating co) is ~11 billion, so hopefully that puts into prospective.
They continue to have huge liquidity and access to very large bank lines with few restrictions, but they're definately in the beginning stages of a death spiral. The obvious way out of it is to substantially reduce their fixed costs through plant closures, benefit cuts, layoffs, etc. Not fun topics....but probably several years away from BK broiler.....debt already trades like its well into "junk" status.