Monday, October 15, 2012
As we approach the election, GM is anything but a long-term success story
As of today, GM is still in a horrendous slide, which could be much worse if it were not for its success in China. In the U.S., their cars are being sold as with deep discounts, or taken off the lots via fleet sales. The GM Volt is manufactured for more than 60k per unit, and sold for half that! In Europe, GM is doing all it can to distance itself from the Opel brand and replace it with Chevrolet badges. Would any good German buy a Chevrolet knowing what GM has done to Opel, and of course in the recent past Saab? GM management located in the U.S. has thrown the Europeans under the bus, and the latter know it.
GM market share in the U.S. has slid from 23% in 2007 to 17.5% in 2012. The UAW made no real sacrifice with the bailout, while here in Dayton Delphi retirees have lost their pensions. And then stock values and wealth after the $33 share opening in November of 2010. Now that stock value is at about $20 a share, which represents a 49% government loss relative to he Dow Jones rise since 11/10 of nearly 20%.
All this begs the question of whether or not we will have to experience another bailout after the election. If so, Mr. Romney, who has caught plenty of heat for his 2008 remarks, may have been right after all. Growing up Mit often listened to father George, whose old-fashioned business sense is perhaps worth following now.