Deutsche Bank views GM shares as worthless By Simon Kennedy Last update: 8:09 a.m. EST Nov. 10, 2008 LONDON (MarketWatch) -- Deutsche Bank downgraded General Motors Corp. (GM: , , ) to sell from hold, with a price target of $0, saying the car maker may not be able to fund its U.S. operations beyond December without government intervention. Deutsche Bank said it believes the U.S. government will be compelled to intervene through a capital infusion or loan. "Without government assistance, we believe that GM's collapse would be inevitable, and that it would precipitate systemic risk that would be difficult to overcome for automakers, suppliers, retailers, and sectors of the U.S. economy," the broker said. Even if GM avoids bankruptcy, equity shareholders are unlikely to get anything back, it added.
I agree - unfortunately. No innovation, no vision, no management. Bailing them out will help the economy short to medium term, but the probability of ever getting the taxpayer money back is quite low. GM is too big to fail, but isn't every company these days?
GM is not too big to fail. Most Americans will buy Japanese which are made in America. Yes, UAW's will undergo significant "downsizing". But whats the point? Print money so 100,000's of workers can stay employed building surplus cars that won't be bought??
Oh there is plenty of management by the execs. On how to get paid lucrative salaries & bonuses from a worthless company.
There are plenty of countries trying to shield themselves from trade and international competition. They're not doing well.
your point being, using artificial means (tariffs) to subsidize the existence of an inferior product. How is that different than a bailout ?
GM itself is not to big to fail but GMAC and GM debt and the derivatives on them could be the real problem if they do fail. Who ever sold protection on GM debt probably deserves what they get. The funny thing is today GM products are not that bad, they were in though the mid 80s and 90's and that made them lost tons of customers. The real problem is that the structure of both Ford and GM in the US has so many legacy costs that they are not efficient operations. Then there is the stigma about owning a GM/Ford car due to the crap they put out in prior years. Corvettes are nice but cars but I still expect the guy driving it to have a mullet.
Globalization is economic AIDS. It will do its best to cut down the middle class in well developed countries.