Home / Auto News / News article: GM Headed for Bankruptcy Again: Forbes Op-Ed - AutoGuide.com News
 |  Aug 19 2012, 12:01 PM

Recently we reported that the auto bailout cost had increased to $25 billion, mostly due to General Motors‘ plummeting stock price. Things could, however, get worse for GM before they get any better – if they get any better.

That at least is the opinion of Louis Woodhill, a contributor to Forbes magazine, who has penned a controversial proclamation that America’s largest automaker is headed for bankruptcy once again. Here’s Woodhill’s reasoning:

In the past couple of years since GM went public 0n November 17th, 2010, the American automaker has failed to recapture a significant amount of market share, and some of it newest models have been a little underwhelming to say the least – the Chevy Malibu in particular. Thanks to the bailout, the federal government owns half a billion shares of GM, or about 26-percent of the automaker. While GM’s stock went public at $33 a share, it’s currently hovering around $20 a share, meaning it has dropped in value by a significant 39%.

As a result, in order to break even on the bailout, shares would have to reach $53 each for the government to sell.

Making matters worse is the fact that GM’s stock has underperformed relative to the market. During the period since GM went public in November of 2010, the DOW Industrial Average has risen 20 percent, meaning the current shares have actually lost 49% of their value relative to the DOW.

Woodhill puts the blame on poor products and poor leadership. Initially seen as a flop, the Chevrolet Volt has seen rising sales this year, though it’s hardly enough to keep GM appealing to the masses. The bigger issue is the new Chevy Malibu, the Malibu Eco in particular, which is regarded as uncompetitive with industry leaders.

And then there’s the spate of changes in senior management, most notably the recent departure of Global Marketing Head, Joel Ewanick. According to Woodhill and his crystal ball, CEO Dan Akerson just rearranging the chairs on the deck of the Titanic.

[Source: Forbes]

  • Kdawg

    LOL, what a terrible article.  I’m surprised it wasn’t published closer to November.  GM has plenty of cash and had a record-breaking profit year.

    http://money.cnn.com/2012/02/16/news/companies/gm_earnings/index.htm 

  • Len

    What makes article to sound so convincing is GM PR and MarCom’s failure to tell consumer about the huge progress GM has made during last 3 years, and their world-class car lineup. 
    For those who disagree, when was the last time you drove a GM? Get out of your Toyota, go to Chevy dealer, and take a ruler with you to measure body gaps, check out fuel economy, and see all the features. GM should make some REAL changes in their marketing and PR approach. Scrap your brick and mortar strategy, hire some fresh talent, and please, they DON’T have to be 4.0 GPA students as long as they have talent. 

  • Ramy

    Making up bullshit recalls to fix faulty window switches and trying to up sell current car owners on products isn’t going to save GM. GM= GREEDY MACHINE ! 

  • T. Roll

     Go drive the new Malibu and you’ll be convinced bankruptcy is right around the corner. What a pile.

  • Chaffinjan

    What a bunch of baloney. The guy writing this article obviously has on idea what causes bankruptcy or where GM is with respect to one. A Hack.

  • Hambrickracing

    Yea, this guy is not telling the truth about its stock, Right. You live in a dream world.

  • Sweets50

    So, is Obama going to bail them out again?
     

  • Ziv Bnd

    GM is recording record profits and yet they are going to be going into bankruptcy? What kind of logic is getting from point A to point B? The new Malibu is ok, it is the Impala that sucks, and that dinosaur should be going away soon. And the Sonic actually looks like it is fun to drive, as opposed to past GM efforts in the sub-compact field. I mean, (the now dead Aveo) vs. currently selling Accent vs. Fit vs. Yaris vs. Sonic, which would you pick? The Sonic is leading the pack in sales.

  • David

    not true

  • David
  • Loran Harding

     Google 2014 Chevy Impala. Also Google Cadillac ELR, the Cadillac version of the Volt, coming in early 2014.   GM Chairman announced two weeks ago that a Co. GM invested in has a battery capacity breakthrough that could allow 100 miles on a charge and a 50% chance of 200 miles.  Go GM! Great company from which I am retired.

  • http://pulse.yahoo.com/_GH3KYPJW7LLXPSM5LMFILB35RM Steve

    Gm is NOT a car company any more. It is a social services company thanks to the unions and the government. GM’s costs from medical and retirement are higher than any other car company and having the government in control of it is even worse as costs will escalate as they always do when government gets involved. 
    GM has moved most of its R&D to China and that is where it sells most of its cars. The US taxpayers will get stuck again as GM moves out of the US market and permanently locates to China. 
    The Volt is a DUD and most of the GM’s lineup is not conducive to making profit as labor costs are higher for their cars than any other car company.  
    If you believe what the givernment is saying about record profits, then I have a bridge that I want to sell you. The givernment always lies. Always. 

  • Lexlus42

    Fuck GM and fuck Chrysler.
    I buying a Ford. That seams like America’s last chance for a Obamamotors free car.
    I don’t care if MFT ever gets fixed. FUCK Microsoft. I don’t need that crap I’m my car NEway
    A new ford without MFT will last forever.
    AMERICA IS HEADED TWARDS HELL AND THE PRESIDENT IS DRIVING US THERE.

  • Richard Joash Tan

    AND FUCK YOU YOU BULLSHIT!

  • Richard Joash Tan

    AND YOU ALWAYS LIE BECAUSE YOU ARE A BULLSHIT!!!!!!!!!