GM Exits Bankruptcy Court (Sort of)
GM quietly led themselves out of bankruptcy this morning like the Israelites of the Bible leaving the wilderness after 40 years. GM's foray in bankruptcy court was only 40 days, but transformed them into a much leaner and cleaner company. Like the people of the biblical story, they exit the wilderness with much trepidation and uncertainty as they enter "the Promised Land".
The "new" GM shed over $120B in debt with a few strokes of the pen, and left behind brands familiar to the public including Saab, Hummer, Pontiac, and Saturn. When all cuts are final, the brands remaining will be in over 2,000 fewer dealerships and have a total supporting cast of 64,000 employees at the once powerful auto manufacturer. This is paltry compared to the high level mark of over 400,000 employees and giant market share that the organization once controlled.
Experts are still debating, and likely will for years to come, if the company can actually survice or thrive in the world today. Much will hinge on two factors; the development of new hybrid and electric technology, and the ability to gain and hold market share in China. The worlds largest auto market is currently a strong point for GM and they will need to play to that strength in order to survice more than a short time in the post-bankruptcy world.
Interestingly, the Chinese market is also where some of the stiffest competition will come for GM's Chevy Volt - the highly touted electric vehicle that GM is banking on saving their profitability. China already has competitive models on the showroom floors, thanks largely due to government subsidies to the manufacturers there. Under scrutiny by the international community for their pollution, Beijing has heavily invested in electric technology and supported the manufacturers of electric auto's to improve the county's image in the eyes of the world. Only time will tell if the majority ownership of GM by the US and Canadian governments can compete.
Perhaps they really aren't out of the wilderness yet.
The "new" GM shed over $120B in debt with a few strokes of the pen, and left behind brands familiar to the public including Saab, Hummer, Pontiac, and Saturn. When all cuts are final, the brands remaining will be in over 2,000 fewer dealerships and have a total supporting cast of 64,000 employees at the once powerful auto manufacturer. This is paltry compared to the high level mark of over 400,000 employees and giant market share that the organization once controlled.
Experts are still debating, and likely will for years to come, if the company can actually survice or thrive in the world today. Much will hinge on two factors; the development of new hybrid and electric technology, and the ability to gain and hold market share in China. The worlds largest auto market is currently a strong point for GM and they will need to play to that strength in order to survice more than a short time in the post-bankruptcy world.
Interestingly, the Chinese market is also where some of the stiffest competition will come for GM's Chevy Volt - the highly touted electric vehicle that GM is banking on saving their profitability. China already has competitive models on the showroom floors, thanks largely due to government subsidies to the manufacturers there. Under scrutiny by the international community for their pollution, Beijing has heavily invested in electric technology and supported the manufacturers of electric auto's to improve the county's image in the eyes of the world. Only time will tell if the majority ownership of GM by the US and Canadian governments can compete.
Perhaps they really aren't out of the wilderness yet.
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