DBWI: GM implodes

kernals12

Banned
General Motors is an icon of Corporate America. It employs 1 million people all around the globe, has the 4th largest revenue of any company in the world and the 10th largest stock market valuation. 40% of all cars in America are made by this giant. They managed to survive the energy crises of the 70s and the rise of japanese competition through consistent investment in their products and production methods and by sourcing successful small car models from their European divisions. So how could they have failed, perhaps going bankrupt. Maybe they could blow their cash on stupid boondoggles that sour their reputation for quality.
 
General Motors? Bankrupt? Are you serious? It's one of the bluest of blue chip companies. ROIs might not be fantastic but you know you won't lose any money investing in GM.

So what if they blew some cash on "stupid boondoggles." Did the Edsel bankrupt Ford?

Japanese imports? Small cars from Europe? Sure, there will always be a demographic that will buy a Toyota or a Nissan or a Hyundai or a Volkswagen. And there will always be a much larger demographic that was born and raised in Chevys and Pontiacs. For me, the family car growing up was always a GM, and my first car was a Chevy. Can you put a price on that sort of brand loyalty?

I'm afraid your PoD just doesn't make sense. Maybe one of the smaller American car makers could run into trouble -- AMC, for example -- but GM? Not without an alien space bat who drives a Datsun.
 
General Motors? Bankrupt? Are you serious? It's one of the bluest of blue chip companies. ROIs might not be fantastic but you know you won't lose any money investing in GM.

So what if they blew some cash on "stupid boondoggles." Did the Edsel bankrupt Ford?

Japanese imports? Small cars from Europe? Sure, there will always be a demographic that will buy a Toyota or a Nissan or a Hyundai or a Volkswagen. And there will always be a much larger demographic that was born and raised in Chevys and Pontiacs. For me, the family car growing up was always a GM, and my first car was a Chevy. Can you put a price on that sort of brand loyalty?

I'm afraid your PoD just doesn't make sense. Maybe one of the smaller American car makers could run into trouble -- AMC, for example -- but GM? Not without an alien space bat who drives a Datsun.

Not necessarily. GM definitely remained strong, but there were a few people there on the financial team that were more than a little shady. If the wrong people got promoted and focused on short term gain instead of long term, that could do it. After all, Ford has that funny story related to the energy crisis, namely on how one of the bigwigs' son had a seizure that was stopped with cannabis oil by a former hippy and the two struck a friendship which led to General Moters investing alot more in things like biofuel and green energy, which paid off big time in the future.
 
The hit would be to people with GM pensions or GM stock. They can go bankrupt and keep operating - Apple did it in the 1990s and Chrysler did it in 1980.

The demand is there for vehicles and it's prohibitively expensive to start from scratch. Plus the government doesn't let big companies fail.

There would have either been a bailout, or Nissan/Fiat/Volkswagen/Benz/whoever would buy up the factories at discount and use them to build vehicles for the US market. With GM gone someone has to meet the demand and that's the cheapest way to expand capacity. (And that would be the worst case scenario.)
 
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