11/15/2005

An American Icon About to Be Lost

Crippled by debt of over $276 billion dollars and problems with selling its cars, the world’s largest auto maker is nearing bankruptcy. Some analysts are predicting that GM could file for bankruptcy protections within the next 12 months. Their bonds have already been lowered to below junk status, which is not a good sign to invest in GM. Enormous health care obligations to its workers and competition from foreign car companies are beginning to cripple the world’s largest auto maker. China has recently announced that it will enter the automobile market in the near future. If China is able to produce a quality car, clearly at a much lower cost GM will have even more problems then they been expecting. I think it is sad to see an American icon on the verge of being lost, but as they say that’s business.

3 comments:

Morgan said...

There must be a reason why GM has been doing so poorly. Personally, I don't feel bad for GM. I prefer foreign cars, and if GM can't compete, and hasn't been as profitable, they can't expect to be at the top of their game.

maddy said...

That's business. Maybe if GM could learn to produce a quality product as compared to its foreign competition they wouldn't be hurting so bad. I just have a hard time feeling bad for a company that has made some really stupid decisions.

Dr. Tufte said...

Without getting into the details, it is hard for me to imagine a company with a longer history of bad management than GM. The most amazing thing is that it took them this long to go out of business.

And ... keep in mind they almost went under about 12-14 years ago, so there is no guaranty they will go under this time around.