Forbes-GM is going bankrupt again....

[A Horse With No Name]

http://www.forbes.com/sites/louiswoo...kruptcy-again/

From the article:

President Obama is proud of his bailout of General Motors.

That's good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.

Right now, the government's GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.

It's doubtful that the Obama administration would attempt to sell off the government's massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.

GM is unlikely to hit the wall before the election, but, given current trends, the company could easily do so again before the end of a second Obama term.

In the 1960s, GM averaged a 48.3% share of the U.S. car and truck market. For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011. With a loss of market share comes a loss of relative cost-competitiveness. There is only so much market share that GM can lose before it would no longer have the resources to attempt to recover.

To help understand why GM keeps losing market share, let's look at the saga of the Chevy Malibu.

The Malibu is GM's entry in the automobile market's ' D-Segment'. The D-Segment comprises mid-size, popularly priced, family sedans, like the Toyota Camry and the Honda Accord. The D-Segment accounted for 14.7% of the total U.S. vehicle market in 2011, and 21.3% during the first 7 months of 2012.

Because the D-Segment is the highest volume single vehicle class in the U.S., and the U.S. is GM's home market, it is difficult to imagine how GM could survive long term unless it can profitably develop, manufacture, and market a vehicle that can hold its own in the D-Segment. This is true not only because of the revenue potential of the D-Segment, but also because of what an also-ran Malibu would say about GM's ability to execute at this time in its history.

GM is in the process of introducing a totally redesigned 2013 Chevy Malibu. It will compete in the D-Segment with, among others, the following: the Ford Fusion (totally redesigned for 2013); the Honda Accord (totally redesigned for 2013); the Hyundai Sonata (totally redesigned for 2011); the Nissan Altima (totally redesigned for 2013); the Toyota Camry (refreshed for 2013); and the Volkswagen Passat (totally redesigned for 2012).

Automobile technology is progressing so fast that the best vehicle in a given segment is usually just the newest design in that segment. Accordingly, if a car company comes out with a new, completely redesigned vehicle, it had better be superior to the older models being offered by its competitors. If it is not, the company will spend the next five years (the usual time between major redesigns in this segment) losing market share and/or offering costly 'incentives' to 'move the metal'.

Uh-oh. At this point, it appears that the 2013 Malibu is not only inferior to the 2012 Volkswagen Passat, it's not even as good as the car it replaces, the 2012 Chevy Malibu.

If you follow the automobile enthusiast press, you know that, under the leadership of then product czar Bob Lutz, GM went all out to develop a competitive D-Segment car for the 2008 model year. The result was the 2008 Chevy Malibu, which managed to get itself named by Car and Driver magazine as one of the '10 Best Cars' for 2008.

However, when tested head to head against six other D-Segment sedans in the March 2008 issue of Car and Driver, the 2008 Malibu came in third, behind the Honda Accord and the Nissan Altima. Adjusted to the points scale that Car and Driver uses today, the 2008 Malibu scored 187 points, 6% lower than the winning 2008 Honda Accord's 198 points.

Still, third was a respectable showing. The previous generation of the Malibu, a darling of rental car fleets, would have come in dead last in any D-Segment comparison test.

Acknowledging the importance of the D-Segment to the company' s future, GM's CEO, Dan Akerson, ordered that the introduction of the redesigned 2013 Chevy Malibu be advanced by six months, from the fall of 2012 to the spring of 2012.

In their March 2012 issue, Car and Driver published another D-Segment comparison test, pitting the 2013 Chevy Malibu Eco against five competing vehicles. This time, the Malibu came in dead last.

Not only was the 2013 Malibu (183 points) crushed by the winning 2012 Volkswagen Passat (211 points), it was soundly beaten by the 2012 Honda Accord (198 points), a 5-model-year-old design due for replacement this fall. Worst of all, the 2013 Malibu scored (and placed) lower than the 2008 Malibu would have in the same test.

[FAPTurbo]

Seriously? Forbes allows for 'citizen journalism' to be posted on its website?

What garbage. Of course, the first sentence is factually incorrect as it was Bush that signed TARP in the first place. Why is Obama mentioned front and centre? Hmm.

Also, he has neglected to mention any of GM's other vehicles, including the Sonic and Cruze which are top-selling vehicles.

All in all. This guy is an idiot and regular people shouldn't be allowed to post their whiny, unresearched bull$h! on a reputed publication's website like Forbes. $h!izen journalism, indeed.

[CanadianBacon94]

I don't believe this, do they think the score in each comparison can be used in others?

Do they really think that the old gen Malibu would have still gotten 187 points, compared to curent vehicles?

[A Horse With No Name]

I didn't post this to stir crap, but to point out how far we have to come...

And yeah, I was kind of disgusted reading it myself....

[Drew Dowdell]

Yes, the Malibu is completely outclassed. Good thing GM is class competitive is many many other segments..... there's that whole "making a bit of profit" part too. Chevy is busy winning in every segment below the Malibu right now, so it is a bit late to be sounding the Abandon Ship alarm. The Chevy Spark was one of the fastest moving models last month.

[Drew Dowdell]

http://www.cnbc.com/id/48693576?__source=yahoo|headline|quote|text|&par=yahoo

[Justin Bimmer]

Jalopnik described this article quite well as : "If you read one f@#kheadidly stupid article about GM today, make it this one."

[Turbojett]

Yellow Journalism. Just designed to get you to hate Obama and GM more.

In other news I broke a zipper on my pants this morning because i threw it into the washer unzipped.

Clearly this is Obama's fault. If GM wasn't going down the tubes this never would have happened.

Edited August 16, 2012 by Turbojett

[riviera74]

So the new Malibu has issues. OK: given that GM has vehicles in other segments where they are class-competitive or class-leading, this is a non-issue. Of course Honda, Toyota, Nissan and VW will push out their best efforts in the midsize market. Why? Because that is where 50-75% of their revenues and profits come from. If GM were VW USA or Honda of America, I would be very very worried. Does GM need to push out a better Malibu? Yes, preferably right now. Is a poor showing on the Malibu going to kill GM? No, but Europe can. If this were 2006, where product overlap was rife, I would be very concerned. Does GM need more car people, especially in the executive suite? Absolutely. But GM needs profits and cash flow more. Right now, that is where GM is putting its emphasis on. Besides, the Malibu is not even the most important vehicle in Chevy's lineup for families: that is reserved for the Equinox and Traverse.

[David]

We need to throw idiots like this under the bus. I hope someone remembers to pull this up and roast this moron who is anything but a journalist when this BS proves to be totally false. Sounds like a conservative who did not get his GOP approved TARP bailout so they are doing everything they can to stir up BS against those that actually did some good.

[Robert Hall]

Sounds like Faux News type garbage.

[daves87rs]

Yes, the Malibu is completely outclassed. Good thing GM is class competitive is many many other segments..... there's that whole "making a bit of profit" part too. Chevy is busy winning in every segment below the Malibu right now, so it is a bit late to be sounding the Abandon Ship alarm. The Chevy Spark was one of the fastest moving models last month.

Agreed...

[David]

Yes, the Malibu is completely outclassed. Good thing GM is class competitive is many many other segments..... there's that whole "making a bit of profit" part too. Chevy is busy winning in every segment below the Malibu right now, so it is a bit late to be sounding the Abandon Ship alarm. The Chevy Spark was one of the fastest moving models last month.

Agreed...

Still need to through this in the face of the idiots who thing GM is still going to fail. Seems FORD is having some rough times since they choose to not take a Gov Loan and purge themselves of old debt and union legacy costs.

[daves87rs]

D-I'm not too worried about the Bu'...though they are going to lose a few bucks on them the next few years. They can pull a honda like rehadh pretty quick.....

Might help if they throw the turbo into more of them lineup....

[Drew Dowdell]

I wonder if this new 1.6T coming from Opel might do the trick... but there is only so much that can help with all of the weight still hanging around.