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Thread: GM gone?

  1. #1
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    Default GM gone?

    http://news.bbc.co.uk/1/hi/business/8075818.stm

    just heard this on the new this morning, apparently a russian company are wiling to take over vauxhall and opel
    cant beleive one the the car giants have gone/going

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    Regular Member 67688c's Avatar
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    Of course the company has not gone, and its a Canadian company with part Russian backing.
    They are filing bankruptcy to protect the company so it can continue, which it will of course.
    Do you think I'd have bought a new VX car if I thought they were going to cease trading, or anyone else for that matter....LOL of course not.

    Its just a way of refinancing the business with the USA governments assistance so it can continue, they have actually broke the company into 2 parts, the old part with 28billion of debt and then the profitable parts.

    Hell... the UK is totally bankrupt, as we owe many times more than our gross product, and will take probably many decades to turn it around, but we
    still carry on dont we.

    Many companies go bankrupt, and then re-emerge a couple of days later.
    Also their laws are slightly different to ours, its a way of protecting the company, they will be in a much better position afterwards, and hopefully move forward. Though shareholders have received special deals to offset their emormous losses, they will benefit if GM start making money again, which may be possible in the future now they have got rid of that massive debt.

    Bankruptcy was necessary in order that the company could re-structure itself so that it could continue, no different to what Chrysler did, and though owned by someone else they are still trading and will continue to do so.

    Our privately owned Channel Tunnel did something similar a couple of years ago, it was starting to bring in decent monies, but it had such enormous debts (and still has) that after paying all the interest charges on such a massive debt there was insufficient money left to run the business. So they too did some restrucuring with their creditors which resulted in the company having more money in their pocket so they could continue to run it.

    GM and VX in whatever guise will continue for many years, of that I am sure.
    Last edited by 67688c; 1st June 2009 at 09:04.

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    Regular Member Jezzy's Avatar
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    Don't want to start a fight, but is the UK bankrupt just because of government borrowing? If a private individual earns £40k a year, and buys a house with a £100k mortgage, does that make him a bankrupt on the basis that his debt exceeds his annual earnings? No, because he isn't expected to repay the mortgage back in just one year - he has many years to do so and so long as he keeps to the repayment schedule then it's a business transaction not a bankruptcy. Same for the UK's finances.

    As for GM, their fortunes will improve dramatically as soon as they get the Chevrolet Volt in to production, as it'll sell like hotcakes.

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    Regular Member Maverick's Avatar
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    Lets not get carried away here. The UK is not bankrupt, far from it, we have lots of debt but as long as there are tax payers, there will be a way to pay it off.

    Regarding GM, The European operation (Vauxhall/Opel) are now part of a seperate company to the American GM. The Americam GM will file for bankrupcy protection, which does not mean it has gone bust, but it protects the company from it's creditors.

    This does NOT effect the Vauxhall/Opel as they are now seperate. The new GM Europe company was set up to protect it from the American GM financial problems.

    Magna International have proposed a part buy out of GM Europe with PART backing from a Russian investment company.

    This is a good thing. To be part owned by a company who supply parts to the Automotive industry is no bad thing.

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    Regular Member Pete B's Avatar
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    Quote Originally Posted by Jezzy View Post
    Don't want to start a fight, but is the UK bankrupt just because of government borrowing? If a private individual earns £40k a year, and buys a house with a £100k mortgage, does that make him a bankrupt on the basis that his debt exceeds his annual earnings? No, because he isn't expected to repay the mortgage back in just one year - he has many years to do so and so long as he keeps to the repayment schedule then it's a business transaction not a bankruptcy. Same for the UK's finances.
    That's OK all the time the individual borrower receives regular income, regardless of source, so they can service the montly payment of the mortgage for its term. Probblems arise if that montly payment cannot be serviced - then rising arrears & potential repossession.

    Same with the UK (or any other Country), if it cannot raise sufficient to service the debt now - usually by selling fixed term Guilts IIUC, then problems begin. Similarly, if buyers of the Guilts get cold feet and don't purchase enough, then problems. Furthermore, one day the Guilts term comes to an end and the buyers want the return, this has to be serviced. Of course, the Country cannot be repossessed but without the Guilts sales now to sustain todays borrowing or the ability to repay them in the future, then immeasurable problems at home would arise. However, Countries in financial trouble have one further move that individuals in trouble don't - printing money - but history is littered with the fallout of that policy after being used by various Countries.

    Quote Originally Posted by Jezzy View Post
    As for GM, their fortunes will improve dramatically as soon as they get the Chevrolet Volt in to production, as it'll sell like hotcakes.
    As far as I am aware, GM have been close to trouble for many years - it seems they were stuck in a time warp in the US not making smaller cars people wanted to buy today but continuing to make those big cars people wanted yesterday so they bought other makes instead. I could never make out why they didn't make Americanised versions of the mid range cars that sold so well in Europe. Their generous employee Healthcare plan - something to be envied - but ultimately, couldn't be afforded.

    No doubt GM will re-emerge as a new re-vitalised Company to move forward but without their divested overseas operations. Just hope that Opel/Vx do just as well under their new owners as they have done under GM and don't follow the sad tale of Rover following the breakup & sale of UK Govt/Honda partnership.

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    Regular Member 67688c's Avatar
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    Good sensible replies, which I totally agree with, I was merely trying to illustrate to the OP that because a company has debts, it does not necessarilly mean they are gone as he put it.

    Although the UK has borrowed more money over the last 3 years than the total amount borrowed in the last 300 yrs and will take many years to repay of course it does not mean we are bankrupt.

    I suppose it depends how one would define it, infact the UK still has a triple A financial rating as far as the world financial institutions are concerned which is one of the highest and of course one of the reasons the government has been able to borrow large amounts of money at such favourable terms.

    IOW bankruptcy does not mean the companies gone. Far from it!

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    Regular Member Dan_BlackSRi's Avatar
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    Quote Originally Posted by Cameron43 View Post
    Do you think I'd have bought a new VX car if I thought they were going to cease trading, or anyone else for that matter....LOL of course not.
    I bought a MG ZT just after it went public about their demise, saved me an absolute fortune on the purchase price (the only car not to lose any money when I sold it ) and parts (like they still are now) were just as easy to get hold of.

    If the worst ever happened to VX (not that I think it ever will) the same would surely happen.

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    Regular Member Maverick's Avatar
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    If this had happened 6 years ago with only the Vectra C being the newest model, Vauxhall/Opel could well have gone bust and the Vauxhall name gone.

    But as they have a fantastic model range now with even better cars to come, this is what iskeeping them alive as the investors know too well that Vauxhall/Opel have a good product range for the future to rival most companies.

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    Quote Originally Posted by Maverick View Post
    If this had happened 6 years ago with only the Vectra C being the newest model, Vauxhall/Opel could well have gone bust and the Vauxhall name gone.

    But as they have a fantastic model range now with even better cars to come, this is what iskeeping them alive as the investors know too well that Vauxhall/Opel have a good product range for the future to rival most companies.


    I certainly think the new models of Astra's coming out later in the year will sell extremely well indeed, I think the new Astra looks brilliant.
    As long as the whole range does'nt end up suffering from the Russian Doll syndrome where they all look too similar, and they price them right.

    VX have certainly raised their game, if I had to sum up the Insignia, if one ignores the badge (which some people cant) , it definately looks a far more expensive car than it is. So if they can repeat the success they are having with the Insignia across the range, things could be looking better for them in the future.

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    Regular Member Maverick's Avatar
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    Why would you think that they will suffer the "Russian Doll Syndrome"? The Russians have nothing to do with the day to day running of GM Europe. They are just an investment company working with Magna, not a car company. They won't have any influence over the dynamics and design of the cars.

    Regarding the cost of the Insignia, it's not that cheap. I specced up an Elite 2.0 CDTi 160 Estate with 19's, VXR style pack, Auto box and AFL and it touched £30K!

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