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GM's return to top continues as it rejoins S&P 500

Fenton said:
Some guy posted a video on you tube of his attempting to interview Obama supporters. It was a lesson in self control for me, as I just couldn't fathom that there were people that stupid voting in our elections.
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You and Grant need to visit a tailor I know who sells incredibly beautiful clothing that only smart people like you can see. You would love the stuff he sells.
 
Grant said:
And Californians are quickly becoming familiar with all of them.
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LOL....I've been hearing those doom and gloom predictions from the right-wing for the last 2 decades......and California is still the crown jewel of the United States.
 
Visbek said:
Uh, not quite.

Any agreement would need union support, due to the pension obligations.

No one in the private sector was remotely interested in buying GM. "Managed bankruptcy" was not an option -- if it was, the execs would not have crawled to DC to beg for a bailout.

A stock with crappy fundamentals and no future isn't going to go up, even in a bull market. Apple, which is still killing it in terms of profits and cash on hand, has had its stock price drop for the past 9 months.
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You really believe if the unions hadn't existed, that GM would have been saved? Obama spent every waking second bashing big business. Then suddenly, he steps up and saves them.
 
upsideguy said:
Its not a fraud, GM was bankrupt... the stockholders get nothing in a bankruptcy. That is the way it works.
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False. Preferred investments get first pick of the assets when a company files for bankruptcy, the unsecured investments divide what is left over. The Unions held unsecured investments but were paid first anyway by order of the White House who oversaw the restructuring.
 
I must have missed the discussion, but GM has returned to the top of what?
 
i miss Pontiac. hope that the brand is revived at some point. the Solstice was one of the coolest affordable cars ever made. you can't put anything bigger than a bologna sandwich in the "trunk," but that's the case for most two seaters, and it's like driving the batmobile. my folks have one of these, and it's awesome.
 
upsideguy said:
GM made $.58/share in the first quarter and had positive cash flow from operations of $500B. The free cash flow is a non-GAAP financial metric which deals with the ability of a company to cover its capital investment (not service its debt) out of cash flow. It might be like measuring your ability to payoff (as in eliminate) your mortgage out of your net salary for the year (as opposed to measuring your ability to make your mortgage payments).
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GM had positive cash flow from operations of $500 BILLION?

I think you need to revist your numbers.

Consider also the fact their underfunded pension liability has been increasing - one of the unsustainable liabilities that forced it into bankruptcy in the first place. Also, the North American UAW/GM contract is little changed from the contract put in place prior to demise of the old GM. Also, don't forget GM was given a $42 billion tax gift from the Obama Administration.

Don't get me wrong, I want GM to survive. I own two GM cars. However, this PR crap being floated out to try to up the share price to lower the loss on our money is bogus.

The money we have lost could have covered the total underfunded pension liability at the time GM went bankrupt. Now that liability is even higher.
 
pbrauer said:
All the credit markets were closed at the time, it was Uncle Sam or nothing. Today there is approximately 1 million people working because of the bailout of GM and Chrysler. The citizens of Ohio showed their appreciation to President Obama by voting for him. Oh and all those workers are paying their share of FIT.
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They would have gotten jobs with other car compsnies when they absorbed the void that GM's closiong would have created.
 
Visbek said:
Net margin has been consistently in positive territory since March 2010. Stock is doing OK. Analyst opinion is mostly hold or buy, with some sell. GM, Ford, Chrysler are all apparently gaining market share.

Seems a bit early to declare it a permanent success, but they certainly have a better shot than if they went belly up in 2007.
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No auto manufacturer in the world had the ability to make up for the loss of millions of cars GM was producing and selling at the time of the BK action. GM would never have closed it's doors. Not ever. The reason nobody stepped forward to buy the company, reorganize it, and capture the tremendous value of it's brands and manufacturing facilities is because the Obama Administration and Democrats in Congress didn't want anyone to buy it.

GM's pension program is the largest in the United States by a staggering number. AT&T is the second largest plan, and it's a fraction of the size of GM's plan. GM's UAW pension plan will likely eat GM alive, again.
 
AliHajiSheik said:
I must have missed the discussion, but GM has returned to the top of what?
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The top of the political immunity list. i.e. they don't have to worry about being targetted by the IRS, or the EPA.
 
pbrauer said:
Really? Four years in advance, they were bribed? Sureeeeeeeeee they were.:rofl
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You claimed that those voters ~"thanked him". A vote of personal "thanks" is most certainly a bribe. Obama basically gave everyone at GM a government job. I guess since he was not able to create a Department of Shovel-Ready Jobs, he commandeered a private company and used that. Does anyone honestly believe that Ohio being a swing state never entered into the equation?
 
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ecofarm said:
You claimed that those voters ~"thanked him". A vote of personal "thanks" is most certainly a bribe. Obama basically gave everyone at GM a government job. I guess since he was not able to create a Department of Shovel-Ready Jobs, he commandeered a private company and used that. Does anyone honestly believe that Ohio being a swing state never entered into the equation?
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And he gave them that job at the expense of GM's bond holders and tax payers. For decades the union auto industry has been on a roller coaster ride. Once the shareholders seem to be growing their company and accumulating some profits the union comes in wanting their overreaching greedy share. Driving the company once again into insolvency or worse yet bankruptcy.
 
American said:
You really believe if the unions hadn't existed, that GM would have been saved?
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Yes. Absolutely. We're talking about 1 million jobs and a major US industry, blowing up during the worst recession since the 1930s?

And of course, the fact speak for themselves, namely: Big banks and AIG do not have unions, and they also got propped up.


Obama spent every waking second bashing big business. Then suddenly, he steps up and saves them.
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I agree that one major motivation for Obama was to keep people employed. Another was to save the US auto industry. If GM and Chrysler went belly-up, so would most of their suppliers, which would seriously damage the entire auto US auto industry.

And he hasn't spent "every waking second bashing big business." Your misperceptions are not my problem.
 
ecofarm said:
You claimed that those voters ~"thanked him". A vote of personal "thanks" is most certainly a bribe. Obama basically gave everyone at GM a government job. I guess since he was not able to create a Department of Shovel-Ready Jobs, he commandeered a private company and used that. Does anyone honestly believe that Ohio being a swing state never entered into the equation?
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This is silly, what I said here at DP has no bearing on whether it was a bribe. And to imply the stimulus package was about shovel-ready jobs is clearly wrong.

stimpackage.jpg
 
Visbek said:
Yes. Absolutely. We're talking about 1 million jobs and a major US industry, blowing up during the worst recession since the 1930s?

And of course, the fact speak for themselves, namely: Big banks and AIG do not have unions, and they also got propped up.



I agree that one major motivation for Obama was to keep people employed. Another was to save the US auto industry. If GM and Chrysler went belly-up, so would most of their suppliers, which would seriously damage the entire auto US auto industry.

And he hasn't spent "every waking second bashing big business." Your misperceptions are not my problem.
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You must have gone insane with rage when Obama shut down offshore drilling.
 
pbrauer said:
This is silly, what I said here at DP has no bearing on whether it was a bribe. And to imply the stimulus package was about shovel-ready jobs is clearly wrong.

stimpackage.jpg
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You still trying to sell those lies about tax cuts?
 
pbrauer said:
This is silly, what I said here at DP has no bearing on whether it was a bribe. And to imply the stimulus package was about shovel-ready jobs is clearly wrong.
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It's like, when countered. you just take yourself out of the equation and run to big spammy excel graphs. I think it is strange to discount ones own observations while using a real username; that's contradictory.
 
disneydude said:
I take it that you aren't aware that there are different types of bankruptcy, right?
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I take it you are aware that with a first lien holder position it doesnt matter? If its bankruptcy they get first rights to proceeds, if its reorganization, they are first in line to made whole through debt repayment.

Obama and the DOJ (which we can totally trust, right?) stepped in and applied political pressure to the lawyers firms representing those bondholders and they recieved around 13cents on the dollar and the unions, in a non preferred position--but had their nose up the President's ass--recieved 90 cents on the dollar.

Equal representation under the law indeed. We are ****ed when political support is used to undermine court precendent as old as the country. Because it means political favor is more important than the law.
 
OpportunityCost said:
I take it you are aware that with a first lien holder position it doesnt matter? If its bankruptcy they get first rights to proceeds, if its reorganization, they are first in line to made whole through debt repayment.

Obama and the DOJ (which we can totally trust, right?) stepped in and applied political pressure to the lawyers firms representing those bondholders and they recieved around 13cents on the dollar and the unions, in a non preferred position--but had their nose up the President's ass--recieved 90 cents on the dollar.

Equal representation under the law indeed. We are ****ed when political support is used to undermine court precendent as old as the country. Because it means political favor is more important than the law.
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Cite for your numbers please...
 
ernst barkmann said:
GM stock must reach $53 a share for the government to recoup its money.

it has been selling stock well under $53
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While that might be true in a sense, think about the jobs the government saved, and the faith in the government to keep major corporations afloat in a time of need. Who knows what would have happened to the American car market if GM went under. Do we simply import and lose all manufacturing jobs? While I agree monetarily that the government has not broken even yet the physiological boost GM's recovery has given the American manufacturing industry is something that cannot be priced.
 
iacardsfan said:
While that might be true in a sense, think about the jobs the government saved, and the faith in the government to keep major corporations afloat in a time of need. Who knows what would have happened to the American car market if GM went under. Do we simply import and lose all manufacturing jobs? While I agree monetarily that the government has not broken even yet the physiological boost GM's recovery has given the American manufacturing industry is something that cannot be priced.
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There are other automobile manufacturers in the United States, Ford among them, who now have to compete against the deep pockets of government. $17 trillion in debt and the government is financing an industry where there is no shortage of vehicles, no shortage of cars on the road? How does that make any sense at all?

There was the same logic about "creating jobs" in solar companies, remember the speeches?, and billions just went to friends of the government, just as it always does. How can corruption in government ever be stopped when the electorate encourages it?
 
upsideguy said:
Cite for your numbers please...
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You first. Show me that first lien holders position matters based on the type of bankruptcy.

Nah, Ill toss a few sources at you. I expect the same in return.

Bondholder furious over GM bankruptcy – American Morning - CNN.com Blogs
G.M. Bondholders: We're Not Seeking Bankruptcy - NYTimes.com
The Auto Bailout and the Rule of Law > Publications > National Affairs
Old GM Bondholders Getting Shares in New General Motors May Depress Price - Bloomberg

Some excerpts:
Well, what happened, John, I got this booklet at the original thing. This is a 200-page booklet and they sent this in the mail and the offering was two shares of stock for every $1,000. That's 140 shares of stock. They said originally in the booklet it was going to be 225 shares, but as you kept reading the booklet it said they were going to convert that to 101 reverse-split, which would be two shares of stock. $70,000 for 140 shares of stock.
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Of the two proceedings, Chrysler's was clearly the more egregious. In the years leading up to the economic crisis, Chrysler had been unable to acquire routine financing and so had been forced to turn to so-called secured debt in order to fund its operations. Secured debt takes first priority in payment; it is also typically preserved during bankruptcy under what is referred to as the "absolute priority" rule — since the lender of secured debt offers a loan to a troubled borrower only because he is guaranteed first repayment when the loan is up. In the Chrysler case, however, creditors who held the company's secured bonds were steamrolled into accepting 29 cents on the dollar for their loans. Meanwhile, the underfunded pension plans of the United Auto Workers — unsecured creditors, but possessed of better political connections — received more than 40 cents on the dollar.
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When U.S. Bankruptcy Court releases the warrants and stock through a trust, bondholders will collectively get 136.4 million warrants for one share each at $10 a share and an equal amount at $18.33 a share, said Wilmington Trust, which is based in Wilmington, Delaware.

Owners of old GM bonds must notify Wilmington Trust by April 15 to get stock and warrants on April 21. If they notify Wilmington later, the bondholders will get their shares and warrants at a later date.

Currently, Motors Liquidation has about $30 billion in claims allowed by bankruptcy court, of which about $29 billion are from the bondholders, said a person familiar with the matter.
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Depends on what source you use, and what the valuation of the stocks are, but the unions were given better position in the new company than their agreements warranted...legally.

Just an FYI but current GM stock is $34.95/share.
 
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