GM Bankruptcy Filing For A New Start

GM Files Bankruptcy June 1, 2009

The Automotive Tribune has chronicled the evolution of this saga for some time with focus into selected or unique issues associated with the auto maker.  All car guys have some level of concern whether or not you like GM because problems with one manufacturer o supplier affects teh entire industry.  GM’s formal bankruptcy filing on June 1st in Manhattan is historic.

State Of The Industry

Latest sales numbers show annual sales running about 9.5 million units.  This is historic low and is causing serious economic problems throughout the industry where 17 million units were being sold at the start of the decade.

GM’s New Size

It has been reported that GM wants to establish a size that will be profitable at 10 million.  That is ambitious but a realistic target.  Major shrinkage is required.  However, if GMcould function at that level they would be well positioned for better times. 

A Comprehensive Plan

Comprehensive business plan has not been released.  June 1st was the Bankruptcy Filing and much is in the media.  Detailed plans will emerge over the summer.  One thing is for sure, GM will be re-cast.  From the glory days after WWII to the muscle cars of the 60’s to the smog machines of the 70’s into the 80’s where 45% market share dropped by about 1% per year to today with about 20%.

GM For The Future

The old GM turned into the Dinosaur.  Bankruptcy is a good thing.  Government control at least provides an opportunity for change, on many fronts.  For the car guy GM does have some great cars.  Unfortunately GM’s management was so totally disconnected from the cars for so many years it was impossible to turn things around.

GM Heritage Significance

Could Government Motors Be Worse?  This is very unlikely.  There is a strong heritage and with new product all Car Guys can hope that this heritage is maintained.  We will kno what is in the business plan to go forward as it unfolds this summer.