Chevy Volt a Failure - GM to Layoff 1,300

da man · Mar 13, 2014

Just read this in a column about GM's response to the recall story and it really irks me:

But investors are selling mostly on perception because the company’s financial stake in this case is extremely limited. Thanks to its 2009 bankruptcy, GM is not liable for problems prior to going Chapter 11. That means it’s only on the hook for repairs to the recalled cars. Wall Street estimates that cost at about $150 million.

Also, I thought this was the electric car news/debate thread. Is it also the GM news/debate thread?

I'm confused.

murphyc · Mar 13, 2014

da man said:

Just read this in a column about GM's response to the recall story and it really irks me:

But investors are selling mostly on perception because the company’s financial stake in this case is extremely limited. Thanks to its 2009 bankruptcy, GM is not liable for problems prior to going Chapter 11. That means it’s only on the hook for repairs to the recalled cars. Wall Street estimates that cost at about $150 million.

Also, I thought this was the electric car news/debate thread. Is it also the GM news/debate thread?

I'm confused.
Click to expand...

That part was in the Car and Driver blog I linked.
I figured this thread had gotten so far off topic, linking to other GM news at least brought it closer to topic. It might be a big enough deal for a new thread, who knows.

cranberry · Mar 13, 2014

da man said:

Just read this in a column about GM's response to the recall story and it really irks me:

But investors are selling mostly on perception because the company’s financial stake in this case is extremely limited. Thanks to its 2009 bankruptcy, GM is not liable for problems prior to going Chapter 11. That means it’s only on the hook for repairs to the recalled cars. Wall Street estimates that cost at about $150 million.

Also, I thought this was the electric car news/debate thread. Is it also the GM news/debate thread?

I'm confused.
Click to expand...

Why does it irk you that GM would be treated like any other company that has emerged from Chapter 11?

TigerVols · Mar 14, 2014

cranberry said:

da man said:

Just read this in a column about GM's response to the recall story and it really irks me:

But investors are selling mostly on perception because the company’s financial stake in this case is extremely limited. Thanks to its 2009 bankruptcy, GM is not liable for problems prior to going Chapter 11. That means it’s only on the hook for repairs to the recalled cars. Wall Street estimates that cost at about $150 million.

Also, I thought this was the electric car news/debate thread. Is it also the GM news/debate thread?

I'm confused.
Click to expand...

Why does it irk you that GM would be treated like any other company that has emerged from Chapter 11?
Click to expand...

I'm thinking it's not bankruptcy attorneys who GM needs -- but criminal.

http://www.latimes.com/business/autos/la-fi-hy-autos-303-deaths-linked-to-recall-gm-20140313,0,4720511.story#axzz2vwmriIpN

da man · Mar 14, 2014

TigerVols said:

cranberry said:

da man said:

Just read this in a column about GM's response to the recall story and it really irks me:

But investors are selling mostly on perception because the company’s financial stake in this case is extremely limited. Thanks to its 2009 bankruptcy, GM is not liable for problems prior to going Chapter 11. That means it’s only on the hook for repairs to the recalled cars. Wall Street estimates that cost at about $150 million.

Also, I thought this was the electric car news/debate thread. Is it also the GM news/debate thread?

I'm confused.
Click to expand...

Why does it irk you that GM would be treated like any other company that has emerged from Chapter 11?
Click to expand...

I'm thinking it's not bankruptcy attorneys who GM needs -- but criminal.

http://www.latimes.com/business/autos/la-fi-hy-autos-303-deaths-linked-to-recall-gm-20140313,0,4720511.story#axzz2vwmriIpN
Click to expand...

Cran: It irks me that GM can create this problem and willfully ignore it for years but somehow not be liable. I'm not an expert on bankruptcy laws and procedures, so this might well be SOP. Doesn't mean I have to like it.

TV: DOJ has already begun an investigation through the U.S. Attorney's office in New York and is looking into potential criminal charges.

Also, note that the 303 deaths cited is a raw number for deaths in all accidents in those model vehicles in which the air bags did not deploy. There are a number of reasons that could have happened other than the faulty ignition switch and it's very likely many or most of those deaths had nothing to do with this particular defect. That said, I'd be willing to bet the number is higher than the 12 or 13 that have been confirmed so far.

murphyc · Mar 14, 2014

TigerVols said:

cranberry said:

da man said:

Just read this in a column about GM's response to the recall story and it really irks me:

But investors are selling mostly on perception because the company’s financial stake in this case is extremely limited. Thanks to its 2009 bankruptcy, GM is not liable for problems prior to going Chapter 11. That means it’s only on the hook for repairs to the recalled cars. Wall Street estimates that cost at about $150 million.

Also, I thought this was the electric car news/debate thread. Is it also the GM news/debate thread?

I'm confused.
Click to expand...

Why does it irk you that GM would be treated like any other company that has emerged from Chapter 11?
Click to expand...

I'm thinking it's not bankruptcy attorneys who GM needs -- but criminal.

http://www.latimes.com/business/autos/la-fi-hy-autos-303-deaths-linked-to-recall-gm-20140313,0,4720511.story#axzz2vwmriIpN
Click to expand...

That 303 number comes with a big asterisk.

On Thursday, the Center for Auto Safety, a nonprofit watchdog group cofounded by Ralph Nader, estimated the death toll at 303. That number, however, is pulled from broader crash statistics involving GM vehicles as new as the 2012 model year and did not correlate the actual reasons why airbags didn’t deploy. The final death count, if internal NHTSA documents provided to the Center for Auto Safety do indeed point to an ignition problem, could certainly be higher than 12.
Click to expand...

http://blog.caranddriver.com/gm-aware-of-ignition-switch-problem-three-years-earlier-than-originally-stated-before-many-models-were-on-sale/

Regardless, I see this getting worse for GM in the days to come, especially as mainstream media starts picking up on it. For example, does anyone think the death number will stay at 12?
This could really get worse for GM if it's determined more models have the same ignition issue.

Armchair_QB · Mar 14, 2014

da man said:

TV: DOJ has already begun an investigation through the U.S. Attorney's office in New York and is looking into potential criminal charges.

Also, note that the 303 deaths cited is a raw number for deaths in all accidents in those model vehicles in which the air bags did not deploy. There are a number of reasons that could have happened other than the faulty ignition switch and it's very likely many or most of those deaths had nothing to do with this particular defect. That said, I'd be willing to bet the number is higher than the 12 or 13 that have been confirmed so far.
Click to expand...

Oh, I'm sure Holder will get right to the bottom of any malfeasance at Obama Motors…

murphyc · Mar 21, 2014

So the first CEO in GM history is being called before Congress soon. At least she'll have company: the interim head of the NHTSA will be testifying as well.
http://blog.caranddriver.com/gm-ceo-barra-called-to-testify-in-front-of-u-s-house-over-ignition-recall/

The timing of this is making me curious. Mary Barra was appointed CEO just a few weeks before this news broke. I can't help but wonder if some higher up honchos at GM weren't pleased with the selection and decided to make her job a bit more difficult. Of course that would make their own company hurt, but maybe they figured the 'new' GM couldn't be held liable so they wouldn't take a personal bath financially while Barra gets the honor of taking the hits as the CEO.
Conspiracy theory sounding, I realize, but still...

old_tony · Apr 7, 2014

Tesla car buyer files lawsuit under Lemon Law.

http://bit.ly/1qeyQ4A

TigerVols · Jun 20, 2014

The Big Ragu said:

Tesla's valuation is 40 percent of GM's -- on sales of 25,000 cars. It's P/E ratio is more than 15 times greater than GM's.

That either says a lot about Tesla and how great a company it is, or a lot about how crappy a company GM is. I'd bet on it being more that Tesla is way overvalued -- particularly because, if you look at who owns each, the profile for Tesla is a bunch of momentum traders who have had a field day causing stop-loss selling for anyone who has been foolish enough to short Tesla. GM, on the other hand, has apparently become a buy for a lot of hedge funds looking for value. George Soros has been a big owner and added to his stake at the end of last year. Kyle Bass is a big owner. David Einhorn has a big stake.

I'd love to be short Tesla -- because I know eventually it is going to crash down to earth. But I can't sustain getting battered by a truck with no brakes, while I wait for sanity to reenter the world.

The good news for Tesla, in what it reported -- it is no longer selling emissions credits as its main source of income. At least it is living and dying as a car company.

The bad news -- it is a niche car maker -- selling $75,000 + luxury cars to a bunch of recent stock market millionaires. As long as we have cheap credit stimulating a phony economy -- that is benefiting only a small amount of people, it can hang in there selling cars to those people -- even if it doesn't justify anywhere near that valuation. It's plan for growth is to expand into China and feed its new batch of credit millionaires -- as China has been fueling a credit bubble that looks like the U.S. in 2006 and 2007. When the overall credit bubble pops, and it will, it is not a stock I would want to be holding.

As for the cars themselves? I will still bet that it will never be anything other than the niche market it is today. I may be wrong, but I am going to have to be proven wrong. It has less to do with EV vs. gasoline than the fact that not many people are in the luxury car market. If Tesla tries to move into a more generalized marketplace, it finds out what the Nissan Leaf has found -- this is a technology with little mainstream demand at the price point it comes in at.
Click to expand...

Tesla's the most important car manufacturer in the world?

http://www.latimes.com/business/autos/la-fi-hy-tesla-most-important-automaker-20140620-story.html

The Big Ragu · Jun 20, 2014

That Morgan Stanely report was a few days ago. It most got eye rolls. I happened to see this on TV that day:

video.cnbc.com/gallery/?video=3000285547

********

"Most important" car company in the world doesn't really address the valuation I spoke about in what you quoted.

But no, I personally can't see any justification for calling a company that sold less than 23,000 cars last year the "most important car company in the world" (GM sold nearly 10 million) -- even in a game of throwing around silly and meaningless hyperbole.

Aside from that, there is still the ridiculous valuation that Morgan Stanley just ignores, projecting years out with insane numbers to create fantasy growth that will take a magic wand.

This is a momentum stock that has been driven by frenzied traders who pushed up lots of other momo stocks in what has led to a way overvalued stock market. I'd question anyone who tells me they are invested in Tesla for fundamental reasons -- they couldn't justify their position based on price, earnings, sales, etc. All anyone has is meaningless hyperbole and trading momentum (which has actually fizzled).

I would bet with reasonable certainty that Tesla stock will be trading at a third to a quarter of where it is now at some point -- maybe very soon, maybe 1 or 2 years out if the Fed can inflate the bubble even farther. If I could time that, I would short the stock. But the Federal Reserve can create asset price inflation that has the effect of driving up stocks even farther -- nobody can time when this is going to pop, even if it is a certainty, which is why you can't bet against Tesla unless you have very deep pockets to whether all the short squeezes. Whenever the stock market gets pin pricked and collapses, though, Tesla will be one of the biggest thuds. It is going to be a bloodbath.

Inky_Wretch · Jul 29, 2014

So far this year, roughly 54,973 plug-in electric and battery-electric vehicles have been sold in the United States.

That sounds negligible at first — it's a scant 0.67 percent of the 8.1 million vehicles sold in 2014. But it also represents a 35 percent jump over last year. And both May and June were record sales months.

http://www.vox.com/2014/7/28/5944065/electric-cars-plug-in-vehicles-rising-sales-US

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Chevy Volt a Failure - GM to Layoff 1,300

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