The bad news keeps coming for General Motors (NYSE: GM). Yesterday, Goldman Sachs (NYSE: GS) announced that it will no longer cover the company.

A Goldman analyst said that there is no way to value GM or set a price target given the uncertainty surrounding the company. GM needs $22 billion in new capital, but no one knows where that money will come from, if it will come at all. Even the remarkably generous U.S. federal government is now cooling to the idea of a bailout of the automakers. And at this point, it's pretty much the federal government or no one.

It's interesting to note that at GM's current share price of $3, the company has a market cap of less than $2 billion. Providing more than ten times that number in aid is not exactly an attractive proposition.

And there was yet more bad news this morning as three major insurers announced that they would no longer provide credit insurance for suppliers of GM and Ford Motor (NYSE: F). The three insurers Euler Hermes, Atradius and Coface are little known in the U.S. but they play a crucial role in providing insurance against companies failing to pay their bills. Together, the three control 80% of the global market for credit insurance.

The withdrawal of this insurance will be felt most powerfully in Europe, where Ford and GM have substantial operations. U.S. suppliers typically operate without such insurance, but in Europe it's the norm. While the loss of this coverage may not be catastrophic, it looks like another moment in the downward slide of the American automotive industry.

 

Oh my gosh...

This really depresses me.

 

Let them sink.........."I gave at my dealership". If they want to use my freakin tax money, there better be a Z06 in my driveway. The big three have been dealin with the devil, aka u n i o n s, and to quote pastor wright............"their chickens are comin home to roost".

 

The Heartbeat of America ....

Beep, ........ beep, ........ beep, ........ beep, ........ beeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee ...

 

^ I lol'd, but it's not that funny, if GM goes under I don't know what I'd switch to... Maybe I'd just stick with older cars until some new company starts to appeal to me.

 

im still looking for my 70 RT challenger.... ;-)

 

I'm not only concerned for others for the jobs, but the trickle down effect of the suppliers. My job would be in peril, also.

I have NO intentions of buying another new car. We have an 82, 99, 04, and 07. NO new cars for me! I have enough knowledge of what are good cars and what isn't, and there are A LOT of GM cars that will become more valuable with time. The really reliable ones, like all the FWD 3.8L cars, and MANY others. Maybe another Camaro is in the future, or a WS6 Trans Am!

 

GM dug its own grave. They were great in the 50's, 60's, and 70's, when that had a decent Market Share and were building some pretty popular cars in huge numbers and selling all of them. Then, they got into the Financing. What GM became was a Finance Company that happened to build a few cars, too. What got sold, after the UAW took their sweet time building, at wages they made the Company pay with benefits for families and retirees, started costing much more to build than they should. But, since GM was making good dough selling and Financing what took the forever to produce; the Bottom Line started shrinking. Pushing-out a product that got built with lower standards resulted in GM losing fortunes that should have been billed to the UAW! Down the road, consumers loyalty shattered and Detroit started slowing-down because people wanted cars that were fun to drive; not bring-in to get fixed.
The General got tired and dragged-out the same-old power-plants or platforms for something disguised as new. Savvy buyers looked and saw the same-old crap and went-out and bought a Honda or a Toyota.

You got to put a gun to somebody's head, at GM, to get them to out of the past and back into the game of making a car people are willing to go-in, sit-down and order.
Maybe next year is what the Auto Press would say after looking at the Concept Cars GM would show-off at the Circus.
We're down to the real "Nitty-Gritty" now, folks.
Either GM decides to build something that is going to arouse the car-buying public enough to sell a few million; or the last guy out locks-up and hit the lights.

 

Let them sink.........."I gave at my dealership". If they want to use my freakin tax money, there better be a Z06 in my driveway. The big three have been dealin with the devil, aka u n i o n s, and to quote pastor wright............"their chickens are comin home to roost".


There's more at stake here then just letting the big 3 sink.

There's also millions of retirees depending on the companies even though they're retired. What about these people????

What about the suppliers that depend on the auto industry for their income?

There is a farther reaching reaction here then realized.

 

That's exactly right, IMO.

You think the corporate execs who make 6, 7, or even 8digit salaries are going to be hurting? No. It's the people like RJ and Wayne mentioned that will feel it. Eventually, everyonefeels it too.The guy working at Best Buy (for example) selling tv's loses his job because people aren't buying the big ticket items anymore.

I thinkthe U.S. and Canada have cometo rely too much on the automobile industry to keep the economy afloat.It was good times when the big three were building plantsand supplying jobs all over North America. But now that this one industry isfailing, the entire economy is in jeopardy.