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gm in real trouble
GM shares fall 30 percent after S&P statement
Thursday October 9, 4:00 pm ET
By Bree Fowler, AP Auto Writer
GM shares fall 30 percent after S&P places ratings on CreditWatch for possible downgrade
NEW YORK (AP) -- General Motors shares have fallen more than 30 percent after Standard & Poor's Ratings Services said it's placing the automaker's credit ratings under review for possible downgrade.
S&P said Thursday that the move reflects the weakening automotive markets across the world and expectations that tight credit markets will make things tough for the near future.
GM shares fell $2.26, or 33 percent, to $4.65, helping drag the Dow Jones industrial average down by more than 600 points. That's the lowest price for GM shares since March 1950.
The ratings under review include GM's "B-" long-term corporate credit rating and its finance arm's "B-" long-term counterparty credit rating.
S&P says it believes GM has enough cash for at least the rest of 2008, but rapidly worsening industry conditions will make things tough in 2009.
looks like Hendrick will have to switch to Toyota
Thursday October 9, 4:00 pm ET
By Bree Fowler, AP Auto Writer
GM shares fall 30 percent after S&P places ratings on CreditWatch for possible downgrade
NEW YORK (AP) -- General Motors shares have fallen more than 30 percent after Standard & Poor's Ratings Services said it's placing the automaker's credit ratings under review for possible downgrade.
S&P said Thursday that the move reflects the weakening automotive markets across the world and expectations that tight credit markets will make things tough for the near future.
GM shares fell $2.26, or 33 percent, to $4.65, helping drag the Dow Jones industrial average down by more than 600 points. That's the lowest price for GM shares since March 1950.
The ratings under review include GM's "B-" long-term corporate credit rating and its finance arm's "B-" long-term counterparty credit rating.
S&P says it believes GM has enough cash for at least the rest of 2008, but rapidly worsening industry conditions will make things tough in 2009.
looks like Hendrick will have to switch to Toyota
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Replies to This Discussion
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Permalink Reply by WJM on
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Credit is the lifeblood of the auto industry. Dealers, regardless of brand, need it to finance their inventories and consumers need it to buy products from those inventories. The credit freeze has become a global crisis and has very little if nothing to do with Barack Obama or John McCain. What we're experiencing now was first planted when the tech bubble burst in 2000. What? Two words: Liquidity Puts.
Back to racing...
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Permalink Reply by TOG on
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GM should NOT be investing in ANY racing team with these troubles. Racing should be the last thing they are worried about.
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If I were a stockholder in GM, Ford or Toyota I would have to question committing umpteen millions into racing. Race on Sunday, sell on Monday died a long time ago. The Detroit Three are in survival mode and should have learned by now that NASCAR or any other series is not going to throw them a life line. In fact, since the introduction of the Uni-Car, I've thought that NASCAR should be paying a licensing fee to the manufacturer to display their brand and model logo.
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Permalink Reply by Lance on
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It's about adverstising. Nascar is still the best bang for you buck out there.
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Permalink Reply by dawg on
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This is so not true. In today's environment it's not about performance. It's about fuel mileage. While it's theoretically possible for changes in cylinder head, & cc design to give some economy gains. Racing engines are primarily about power.
Is anyone but me old enough to remember the Mobil Gas Economy Runs fron the 50's?
Something along those lines would be where the smart marketing $$ would be in today's times.
Were I running GM, I would take every penny that goes to any form of racing, & put it toward the VOLT program.
I think the real question is not will the American manufacturers pull out of NA$CAR, but will they survive W/O going into ch. 11?
No one, myself included, wants to see GM, Ford, or Chrysler go into bankruptcy.
We should however, understand all these mind boggeling $ figurse we hear about, are not just laying around. They come from cranking up the printing press.
These chickens WILL come home to roost, maybe they already are.
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Permalink Reply by Keith on
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They should require Tony Stewart to pay back his share of the SHR deal as well. Everybody knows that was GM's way of stealing a top driver from TOYOTA.
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Permalink Reply by Turtle7 on
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Look at the AMC / Chrysler buy out. Over time only the Jeep survived. The question is in what market segments are the Chrysler brands stronger then GM? The answer is as far as I know, minivans that aren't so mini anymore. I don't know why GM would want to pour money into a buy out unless the Chrysler factories are newer or more efficient then GM's. But that means that Chrysler would get nothing for its brand names and Cerberus / Daimler would have to eat a lot of lossed capital [selling for pennies on the dollar].
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Permalink Reply by zoomsss on
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Found this on CompetitionPlus site while looking for other news... as much as they tout that staying involved in racing, keeps their loyal 60% customers coming back, with the 'cleansing' as I've termed it, I think it's gonna be a good long while b4 they see those 60% in showrooms buying cars.
THE BIG THREE DOWNSIZING?
Written by Bobby Bennett
Sunday, 12 October 2008
GM reportedly talking merger with Chrysler after pitching the idea to Ford …
This one might put a crimp in motorsports if it comes to pass.
According to a Reuters report released on Saturday, General Motors has engaged in talks with Chrysler LLC regarding a merger at a time when both are struggling to cut costs and grow cash. Months earlier, according to the same source, GM had approached Ford with a similar scenario.
Reportedly, the talks are off for the present, but should they resume, the Big Three could downsize.
The report also stated that Barron’s, a weekly publication for investors from the publisher of the Wall Street Journal, reported that GM was preparing to approach the U.S. Federal Reserve about borrowing money from the central bank's discount window because of the logjam in credit markets that has shut it out of other borrowing.
This move comes in unison as the three Detroit-based automakers struggle with 15-year lows of sales and questions whether they have cash to weather the financial storm.
Analysts predict urgent steps by U.S. automakers to shore up cash could be the norm as the worldwide financial crisis begins to affect auto sales in the usually strong markets in Europe, Asia and South America.
Chrysler, which no longer discloses results as a private company, reportedly has had discussions about a tie-up with India's Tata Motors and Italy's Fiat in recent months.
GM shares plummeted to near a 60-year low this week based on worries the worldwide financial crisis could derail plans for a turnaround.
GM along with Ford has reportedly ruled out seeking bankruptcy protection at this time.
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