SEARCH BLOG: AUTOMOBILES
The presumption is that General Motors will eventually... soon... go into bankruptcy proceedings, but not necessarily liquidation.
What will GM look like? First, here is what GM's automotive brands look like via the GM website.
While GM has a vast worldwide organization, the US is, by far, its largest... and it's automotive operations are the bulk of that.
GM has somewhere around 6,000+ dealers. It is organized around four primary brand groups:
- Buick - Pontiac - GMC
While Buick, Pontiac, GMC, and Hummer would be disbanded, SAAB might be an opportunity for sale. Arguably, General Motors would try to save the Buick brand. It has a stellar reputation for quality and reliability even if generally boring.
“Buick has ranked among the top 10 nameplates each year since the study was last redesigned in 2003, while Jaguar has moved rapidly up the rankings,” said David Sargent, vice president of automotive research at J.D. Power and Associates.
- Buick - Cadillac
- Lincoln - Mercury
If Buick can be salvaged, the strongest of the Buick - Pontiac - GMC dealers could be converted to Buick - Cadillac... as long as they did not infringe on existing Cadillac dealerships. Otherwise, Buick would be absorbed into existing Cadillac dealerships. Conceivably, several thousand communities will be affected.Suppliers will see significant volume drops in component sales to GM. They may, however, have difficulty extracting higher per-unit prices.
Internally, GM will slash administrative positions... up to 50% of its present salaried organization... within a short time. Design and engineering will be affected, but because of so much component commonality among its existing brands, reducing the number of brands will have less opportunity for staffing reductions... primarily in sheet metal and interior design and selected engineering.
GM will be saddled with an significant amount of hard assets... manufacturing and assembly plants... that are idle and draining cash. Some may be candidates for sale, but in the present economy and industry production overcapacity, these may end up white elephants. GM will still incur state tax liabilities from these assets.
The union will be gutted. Bankruptcy will allow GM to break its contracts and permanent firings will replace buyouts.
Retirees? Hard to say. Pensions are partially funded, but the government may have to take over funding and administration.
What will be the case is certain:
- Significant diminishing of GM corporate
- Massive investment losses by dealers and suppliers
- Essential destruction of the United Auto Workers
- Retirees dependent on the government for replacement of pensions