General Motors exited federal bankruptcy 7/10/09 and many have questioned what does this all mean to me. While there are many promises by the new company and our federal government about the so called "New" GM, it will remain to be seen how this new company resonates with consumers and how it can position itself to repay the $50 million dollars in Government backed loans.
GM CEO Fritz Henderson said, "Business as usual is over at General Motors", I ask, really? with a just announced re-badging of the Pontiac G8 as the new Chevrolet Caprice, you certainly fooled me, isn't this more of the same, isn't this what the old GM did? We have seen this story before, not saying that the Pontiac G8 is not a mighty fine vehicle, which it is, but the public is demanding fresh and bold, new and exciting, Pontiac G8, been there, done that.
Bob Lutz is stating that he is staying on after after being scheduled to retire (he is 77 years old) will end up being GM's Vice Chairman in charge of creative design, brands, marketing and communications. Haven't we been her before, I like Bob Lutz and i think he brought alot to the "Old" GM that they sorely lacked, boldness, some outside collaboration and other attributes. However, I honestly believe that when things get comfortable again, people fall into there old ways and it is high time to bring in outside direction, much like Ford Motor Company did with Alan Mullaly, who was hired from Boeing.
GM needs alot more cash and market capitalization to be in a position to repay the taxpayers much more than they had when GM's market capitalization peaked at about $56 Billion dollars, it needs a minimum market capitalization of $67-$68 Billion dollars to even think about repaying the debt that it is carrying now according to many industry experts. It's market share needs to increase from an expected 16% as it exits bankruptcy to 22-27% a number it has nit reached in quite some time.
With a proposed 2010 IPO, the company could raise some cash to assist in paying down the debt it now has, including the remnants of the pension plans that the "New" Gm is still responsible for.
This may be well and good but the company will have to perform well in the coming year or so to get the confidence of the investment markets to pull off a windfall in a new round of share offerings.
It remains to be seen, what the "New" GM will shape up to be, but they must look towards truly re-inventing itself an d not provide lip service as the current changes to me feel awfully familiar, a road we have been down before.
Enjoy Today!
Kevin Kimbrough
That Car Guy
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