Would you ever invest in GM as a public company again?
There was once a time when General Motors was the blue chip of blue chip stocks.
But then – and not sure if you guys heard – the auto maker started not doing so well. It began putting too much emphasis on the SUV, too much focus on making money from financing and was eventually forced into bankruptcy last year.
Though after years now of disastrous PR, plummeting sales and the company’s taking the brunt of the blame for this latest recession, could GM actually be trusted as a public company once again?
Out of Detroit today, the embattled auto corporation announced it had earned $865 million in its first quarter this year, the first profit for GM since 2007.
According to the New York Times, the company earned $1.7 billion before interest and taxes (a complete turnaround from its $3.4 billion loss in the business’ fourth quarter last year) and now boasts a positive cash flow of $1 billion.
“We’re pleased with our first quarter performance,” Christopher P. Liddell, GM’s CFO, said in a statement, in no way fooling anybody into believing he could’ve predicted such a miraculous rebound. “We’re also steadily growing in emerging markets, keeping our costs under control, generating positive cash flow and maintaining a strong balance sheet.
“These are all important steps as we lay the foundation for a successful GM.”
Now, of course, GM isn’t totally out of the woods yet. Despite its $1.7 billion first quarter gains, the auto maker still lost $500 million in its European operations. And there is that matter of the hotly disputed GM ad, the one featuring CEO Ed Whitacre bragging how his bailed-out company had paid back its loan “in full, with interest, five years ahead of the original schedule.”
(In reality, GM had only repaid the balance of its $8.2 billion loans from the U.S./Canadian governments, and the American federal government still owns 61 per cent of the company. This caused many media members, including myself, to wonder if General Motors was misleading consumers into believing it had made good on all of its borrowing.)
Yet, in any case, there is much room for optimism within GM’s headquarters. Aside from its profitable quarter, analysts figure the auto maker could again go public with a stock offering as soon as the fourth quarter of this year – a move that would allow U.S. taxpayers to recover the billions of dollars they loaned to the once-troubled corporation.
GM is also reported to be considering a re-entry into the auto financing business, which would greatly expand the “pool of consumers who can qualify for attractive loans,” says the New York Times.
So maybe, just maybe, GM can be trusted again.
The question is: would you ever give them your faith? Would you invest in General Motors again following its recent collapse?
By Jason Buckland, MSN Money
Posted by: db | May 17, 2021 4:58:20 PM
I AM JUST WAITING,,,,I BELIEVE IN THE COMPANY AND ITS FUTURE SUCCESS. I THINK THEIR STOCKS ARE WORTH WAITING FOR....I WILL BE BUYING
Posted by: Harvey W | May 17, 2021 8:38:35 PM
I have bought GMC vehicles every 2-3 yr sinince 1965, Have bought 2 Fords (both lemmons) that were Brand New, & traded them back to GM. Marshall Automotive in Peace River, GM is a good product IF they maintain their product to a higher standard to what they have now, & don,t leave it to the Dealers like Marshall Automotive in Peace River, AB to fix their problems!
Posted by: Toronto marketing company | May 18, 2021 3:23:03 AM
This is a powerful list you put together. Thanks for a great post. Very inspirational post. I love your blog. It helps keep me focused! Thank you.
Posted by: Matt Brophy | May 18, 2021 3:55:03 PM
Cant beat the Z71, have one use an abuse it on a daily basis, its a 1996 recently i had to do a job pulling a flare stack off of an oil lease,, the HARLEY DAVIDSON FORD, couldnt get it done had to pull flare stack off an go back for the big so called FORD which broke something in the mud, i would buy into GM, i think i should be the one testing there new vehicles give me one of those bad boys for 3 months i will put her through the paces for ya an let ya know whats gonna break if anything breaks remember were talking GM, built to last
Posted by: mauro hrelia | May 19, 2021 12:20:06 AM
recently my father purchased a nissan cause of the respect their salesmen give to the consumer I purchased a chevy equinox and the service by the salesmen and dealership was totally brutal no respect bottom line they did not care, the nissan dealership wow was I could not say anything but excellent things they really treat consumers with the upmost care, the gm dealership in quote is cater gm Canada I will never ever buy a gm car and will do my best to deter other people from buying.
Posted by: Penny | May 19, 2021 3:19:00 AM
Why anyone would invest in a company as corrupt and two faced as GM is beyond me. What they did to the electric car and the progress of zero-emissions vehicles was unethical and immoral. They led themselves into bankruptcy when they could have been world leaders in newer greener vehicles. They didn't deserve a bailout and I personally will never purchase from them, and discourage everyone I know from buying their vehicles.
Posted by: Scott | May 19, 2021 7:23:07 AM
To Mauro and others
Everyone is entitled to their opinion of GM good or bad but I would like to point out the you should not judge GM by how you were treated by a poorly managed dealer. I woke for a GM dealer and trust me GM is very concerned with how we treat our (their) customers. We have customer service training and standards that we are suppose to meet on a daily basis.
As for the product, if you are talking about the new 2010 Equinox, it is second to none in quality, ride and performance.
There is a lot of good product out there, a lot of good dealers and a lot of choices. I just feel that GM has come a long way and deserves this chance, besides it was not a bailout it was a loan and it is being repaid.
Thanks
Posted by: Mike | May 19, 2021 8:24:27 AM
Hey Scott ... what's your definition of a bail out ? GM couldn't get any public investors who can tell when something is bad ( it stinks ). So along comes the good ol' free world , democratic , free interprize US Government and ' LOANS' GM the money "PLUS" takes over controlling shares to the tune of 61%. That is not a loan ! That is a bail out ! GM has to get investors to buy those shares in order for them to become a public traded company and until then they are a government owned and run company ... so much for your free interprize. GM should have been left to their own demiss and other auto companys would have taken up the slack and all would have been OK .
Posted by: Scott | May 19, 2021 3:51:09 PM
Hi Mike
My definition of a bail out is money that will never be paid back to the taxpayer. GM has already paid back a percentage of the loan ahead of schedule and is on track to pay off the whole loan.
In my book that means that was not a bail out it was a gov. loan with conditions for security such as owning some stock.
For the thousands who would have been on unemployment while waiting for the others to take up the slack, I think it was the right move.
Plus GM and Ford is building just as good a vehicle as the imports and already had plants in place in Canada. Why would we not want them to succeed?
Posted by: Mike | May 20, 2021 1:26:13 AM
Back in '03 I bought a brand new car ... for my first time ... and while the GM dealer was absolutely awesome ( Mertin GM in Chilliwack ) and the car just an el cheapo Sunfire ... the car was for the most part awesome ! It got grate fuel economy, had whack loads of git up n go, and once you did mods such as lowering it and putting in better struts, the car handled like a dream ... like a sports car ! But ... it had driveability issues that the dealer could NOT fix ... no matter how many times I took it in !! I eventually got fed up and traded it for a 2 year newer model with more options and never really had any issues with THAT car !! BUT ... when I went to sell it ... holy !! The thing wasn't worth SPIT !! If you wanna $30k for an iffy quality North American vehicle, and have it depreciate by 10k just driving off the lot ... go for it !! Not bad ... $18,000 car with about $5k in upgrades , 55,000kms , no accidents , well optioned , with 4 NEW winter tires on rims ... $6500 !!!! Two years old !! What better way to TORCH your money than buy North American !! No wonder the Japanese imports have taken over the market !! Current ride ... a 97 Pathfinder with close to 300,000kms all original 'cept for bakes, tires , filters , belts and hoses ! Now that's a quality vehicle !! I will never buy N.A again !!
Posted by: John Cash | May 20, 2021 5:38:46 AM
Why wouldn.t you invest in GM. Look at where they were and where they are going. However there is another company on its way to the sky. www.homeassistcanada.ca You should keep an eye on this one. Its a private comany but provides a real good service to every homeowner in Canada. Check it " Home Assist Canada"
Posted by: Paul Smith | May 20, 2021 11:19:49 AM
Yes I would definetly keep buying GM vehicles, I always had very good luck with their products. And also believe in buying north american vehicles. Why would anybody buy asian products to support the asian economy, sure beats me.
Posted by: Scott | May 21, 2021 8:57:12 AM
I agree with you Paul. I do understand that buying a vehicle is a big decision and people have the right to buy what they think is the best quality, however I think that GM is right up there with the rest of them. I once talked to a consultant that worked with all brands and he said that one being better then the other is very much a perception and media driven. He said that it was funny that no matter what brand shop he was working in that they all had technicians and they all were busy fixing broke vehicles.
As for the Pathfinder with close to 300,000 kms on it, that is great, however we see Cavaliers, Silverado's, Impala's and many more in our shop with over 300,000 all the time that have only had regular maintenance needed. Think about this, Honda Civic is the best selling small car there is and has been for years, yet if you go back to say a 2001 model, what do you see more of still on the road, the Civics or the Cavalier.
Anyone would have it hard to dismiss the quality of the 2010 Equinox, GMC Terrain and the Malibu, Impala, GMC Sierra, and Silverado, not to mention the 2010 Camaro.
As for trade in values, a modified car is often not worth as much on a trade in and I agree that in the past the imports had better trade in values. I think you will see this change big time as GM and Ford prove their quality and they become harder to get now that they are out of flooding the rental companies with no profit vehicles just to get their numbers up.
I am just saying that there is a ton of good product out there now from all brands, GM included and yes they do care about their customers. You will never please everyone no matter how hard to you try and it is usually the unable to please that you hear from most.
Posted by: Chayla | May 25, 2021 10:47:54 PM
Been driving GMs nearly all my life. In 40 years, I've driven at least 10 different types of GM cars and one Ford and one Dodge. I think GM was a much better company 10 years ago than it is now. I have had nothing but trouble with GM parts the last 8 years or so.Alternators, intake manifolds, fuel pumps, door handles, heater motors, ignition switches, starters, power window issues, etc. Poor quality control when it comes to their parts and expensive as hell to buy. Would I buy another GM product now ... I might ... but I doubt it. Too many other great vehicles out there right now, including Toyotas. Say what you want about Toyota, but they came clean with their problems and fessed up, unlike GM when they had a class action lawsuit against them for plastic intake manifolds melting on 3.8 L motors and causing antifreeze to flood the engines. No recalls on that $1,000 fix.
Posted by: Kellie | May 26, 2021 4:43:40 PM
Invest in GM - Are you kidding me?
Ed Whitacre should consider a career in acting, after the scam he attempted in his recent commercial stating GM had paid back thier loan to the government plus interest. That was another scam GM is attempting to pull over the consumer once again. Where is the trust factor? What ever happened to the Chevrolet Volt that was going to be the salvation of the corporation? What about the dealers and their employees who lost everything after GM's attempt at reducing dealerships? - that by the way cost GM nothing! What about the bond holders and suppliers that were financially ruined by the OLD GM? If it were only that easy for the consumer - eliminate all debts and a year later everythings beautiful.
Invest in General Motors - yes , right after GM pays all those affected and destroyed by their bankruptcy!! It is apparent that the GOVERNMENT is involved and supporting this attempt at getting their bailout money back by putting GM back on the stock market. I would vote for Bernie Madoff to be appointed the CEO of the new GM, as he possess the identical mathematical skills.
Posted by: Pat | Jun 3, 2021 2:01:32 PM
I for one, had always thought "GM" was the best! Definitely rethinking this over the past while. Right now I'm driving a FORD Fusion and I hate it. Am not a FORD person at all. That documentary "Who Killed the Electric Car", infuriates me-have seen it several times. I cannot believe they destroyed all those EV1 cars - TOTAL POLITICS! They could have been in the forefront with their technology and it was a great looking car. It's the bloody OIL companies that always end up taking over any rationale. I agree with Kellie. What did happen to the Chevrolet Volt? The OIL companies?? It also makes me angry that the Grand Am was done away with. I had one and totally LOVED it. The Cobalt is a loser as I have seen more Cobalts in the Used Cars guides for sale. Why'd they bring it back? They've got 6 Corvette models (unless you're rich, who can afford it?), the Express, the HHR (both ugly), the G6 and G8 models were both a waste of money. Is there any car from GM that is worth buying and won't end up on the chopping block??
Posted by: Doug Grandy | Jul 21, 2021 1:43:53 PM
I must confess I did not have the time to read your entire blog but I just had to take the time to respond to the question, "Would you ever invest in GM as a public company again?" i WOULD NEVER INVEST MONEY OR TIME IN THAT COMPANY AGAIN. I certainly would never buy another GM product as long as I live ever since they sold me a 1998 piece of crap Grand Am with so many things wrong with it including an excelleration problem...ya Toyota wasn't the only one. They would "fix" the problem only to see it break down a few months later. Back and forth to the dealer until the warranty expires and then they do nothing for you....well I shouldn't say that, they did offer to help me as long as I shelled out the money to PAY for the repairs they never fixed right to begin with. Their customer service stinks and while I hate to see people out of work, it would have made my day had that company went belly up. Only if I get screwed by every other car company out there would I ever go back to GM and I doubt I will live that long. No doubt that every car company has its occassional lemon but customer service is what makes the difference and GM failed at that. Misserably. I could actually go on and on about other various problems I had with that car but I won't. Besides I feel alot better sharing my experience with that company whenever I get the chance. Thank-you
Posted by: internet marketing melbourne | Nov 15, 2021 2:08:15 AM
Very nice blog you havey what they think is the best quality, however I think that GM is right up there with the rest of them. I once talked to a consultant that worked with all brands and he said that one being better then the other is very much a perception and media driven. He said that it was funny that no matter what brand shop he was working in that they all had technicians and they all were busy fixing broke vehicles.
As for the Pathfinder with close to 300,000 kms on it, that is great, however we see Cavaliers, Silverado's, Impala's and many more in our shop with over 300,000 all the time that have only had regular maintenance needed.