The Fall of General Motors

It’s interesting to note that a year ago, General Motors’ public shares were being offered at over $16/share. If you go back over the years, it was heralded by many as one of the most powerful American companies with its capital, human resources, and sound plans for future. No wonder it was easily selected as one of the 30 components of the Dow Jones Industrial Average.

As of this morning, however, the company stock sits at less than $1/share with talks of bankruptcy in the air. Close to ten of GM’s plants will be shut down and a few more will idle as the company continues to reduce production and labor costs under bankruptcy protection.

It’s just sad to see this happen. Ten years ago, who would’ve ever thought that General Motors would be filing for bankruptcy? Heck, security is built into the company’s name – “General!” It’s such a large company with influences in far more than one brand of car. For example, in 2004, the company owned or had stakes in Buick, Cadillac, Chevrolet, Fiat, GMC, Hummer, Pontiac, Saab, Saturn, Suzuki, and a few others. Try going a day without seeing any of the aforementioned cars (or maybe even having one in your own garage) and ask yourself how the mother company could be in this much trouble.

It’s amazing what corporate greed and a few poor financial decisions can have on a seemingly indestructible company. At this time, I really think that if Ford plays its pieces properly and acquires the appropriate remnants of GM’s shattered empire, the company will reign as the undisputed symbol of American cardom. Definitely makes me happy as an investor. πŸ˜€

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2 Comments
  1. UTSWStud says

    Personally, to be honest: Ford, GM, Chrysler all make crappy cars (that’s not the union workers fault as they just follow orders from upper management to make them), so good riddance. It’s the CEOs and the “braintrust” (I use that term loosely) who have no ambition to innovate or even make dependable cars like the Honda Accord. The American people who spend more money on a Ford, GM, or Chrysler than they would on a foreign made car, you would think would have more dependable cars, but they don’t.

    1. Rishi says

      Completely agree with you man. The only good thing about Ford (at least over the last few months) has been riding their stock. Other than that, I’m a German/Japanese car loyalist. During Game 1 of the NBA Finals, I saw a commercial by GM regarding their plans to “restructure.” I couldn’t help but think: “Here we go again.”

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