I remember the GM Roadshow exhibit you refer too. It came to our dealership. It was pretty cool.

I have long been a fan of GM. When I was a really little kid, GM had a science/engineering demonstration like a fair that went around and and showed all sorts of technological marvels. For years I kept some little pamphlets they had handed out. Eventually I went to engineering school on the same university campus that the fair had been.

My dad drove GM cars. I did early on, and then switched to Chrysler and later to the Japanese. It is a shame but it is a fact that the Detroit 3 and the UAW seem to have made a mutual suicide pact.

I hope that they survive, and am willing to consider a 1 year bridge loan, and maybe even a 2 year one but after that, it would be best to go ahead and have the bankruptcy and try to rebuild from the ashes.

ok, maybe that article wasn’t as clear as it could have been.

Here I excerpt one that is complete with graphs, and 4 pages of detail about GM losing 72 Billion dollars the last 4 years.

http://money.cnn.com/2008/11/2…..2008112508

CNNMoney.com

Fortune
Special Report Detroit’s Downfall

”GM: Death of an American Dream”

by Alex Taylor III
Last updated: November 25, 2008. 4:32PM ET

”…
Wagoner’s biggest flaw may be that he has been too forgiving. Here is a company that has lost more than $72 billion in the past four years, and yet you can count on one hand the number of executives who have been reassigned or lost their job. After spending $1 billion to shut down Oldsmobile, Wagoner has allowed GM’s other weak divisions to live on despite their fading resonance in the marketplace. (A competitor says Wagoner is ”too fundamentally decent” to cut off dealerships and put their employees on the street. GM says closing divisions isn’t cost-effective.)”

”Nonetheless, the dedication and thoughtfulness that Wagoner communicated, aMoneylong with measurable signs of progress (growth in foreign markets, successful new products, continued payroll reductions) prompted me to produce a skein of optimistic, if hedged, stories about the company. I should have taken to heart the analysis of Fortune’s Carol Loomis, who saw bankruptcy looming for GM some three years ago. But after my most recent piece suggesting that a real turnaround was at hand, I finally ran out of patience. The company had been caught totally off guard by the spike in oil prices and possessed no backup plan when truck sales cratered and destroyed GM’s business model for North America. Despite hopeful pronouncements, Delphi, its former parts division and now an independent company, took another turn for the worse and sank deeper into bankruptcy.”

”Meanwhile, the credit crunch was squeezing GMAC, GM’s, 49%-owned finance arm, leaving it unable to deliver loans or leases to armies of potential customers. In a high-fixed-cost business like autos, with all those plants, machines, and people, the cash runs off very quickly when times are bad. The macroeconomic forces at work were no fault of GM’s, but, already heavily leveraged, the company had left itself no room to maneuver.”

”If Washington wants to bail out GM, it’s fine with me. A lot of short-term angst will be avoided, and taxpayer money has been spent for worse purposes. But you have to wonder whether the insular, self-absorbed culture that still dominates GM is up to the job of restructuring the company quickly enough to make it profitable and competitive again. GM has been on a downward path ever since I began covering it. What is going to make it different this time? As painful as bankruptcy may be, it would give GM the leverage it needs to redo its labor contracts and dealer franchise agreements, downsize the company, recruit new management, and position itself for an economic upturn in 2010 that would enable it to regain some fraction of its former glory.”

”Once again, boys might even dream of becoming chairman of General Motors.”

I want to check out an Exige just for grins. I hear it is very good, but the last time I checked they didn’t have one available at the local Lotus shop. Had hold of an Esprit some time back (mid 80s) for a week or so; part of it was incredible, the other part just seemed like colin Chapman just kind of quit on.

And bmaz, the only profitable part of GM for years has been GMAC.

My current automotive objet de lust is the Lotus Exige. 26 mpg highway, romper stomps Ferraris and Porsches.

I don’t think you follow these things.
I do. I have friends in industry. I have investments, though not in individual stocks.

The Detroit 3 like the old Steel Mills were whip-sawed into making promises that weren’t funded.

Here is a recent article 3 years ago. Note is refers to 2 years before that.

http://www.businessweek.com/ma….._mz017.htm

BusinessWeek.com

FEBRUARY 7, 2005

”Related Items Chart: GM’s Earnings Crunch

”THE CORPORATION

”GM Is Losing Traction
Its turnaround is threatened by sliding market share, high retiree costs, and the specter of a ”junk” credit rating

”A couple of years ago, General Motors Corp. (GM ) finally seemed to be getting its act together. Profits were strong and the company had recorded back-to-back annual gains in auto market share — something that had not happened since the 1970s. Cadillac and Hummer were genuine hits — and, more important, big moneymakers. Former Chrysler Group (DCX ) star Robert A. Lutz was leading a renaissance in styling, stealing the spotlight at auto shows.

”But today, despite billions invested in new cars, GM is once again losing ground. And suddenly its slide seems to be picking up speed. That point was driven home on Jan. 13, when Chairman and Chief Executive G. Richard Wagoner Jr. announced that he was moving to wall off his most reliable profit machine — the mortgage-lending portion of General Motors Acceptance Co. (GM ) — bowing to the real possibility that his flailing auto business will be downgraded to junk status. Carving out the mortgage lending unit, which contributed a cool $1.1 billion to GM’s bottom line last year, as a separate entity should preserve its credit rating. But finance profits are already shrinking, and could fall further in years ahead. And GM’s scramble shows just how dramatically its options are shrinking. With fewer dollars to squeeze out of finance, the pressure is on to begin delivering significant profits from new cars and trucks.

”HEALTH-COST SPIKE
The gathering fears about GM’s tenuous turnaround were crystallized when Vice-Chairman and Chief Financial Officer John M. Devine told analysts, also on Jan. 13, that auto profits in GM’s vital home market will fall by more than half this year, to $500 million, from $1.2 billion in 2004. The news knocked more than 3%, or $1, off GM’s stock price. The biggest culprit: GM’s retiree health-care costs are expected to spike by $1 billion this year, to $5.3 billion. Total 2005 earnings should tumble at least 20%, from $3.6 billion to between $2.3 billion and $2.9 billion.

”GM has struggled for years with its legacy of costly worker and retiree benefits. Indeed, it’s easy to view the company as a huge medical and pension provider with a side business in manufacturing. Each vehicle GM sells carries a crippling penalty of nearly $2,000 for benefits paid to retirees. Its Japanese rivals, which began manufacturing here within the past 20 years, have far fewer U.S. retirees to worry about. A national pension system in Japan leaves them with much lower fixed costs in their home market. Not so GM. The company made only $213 on average on each of the 5.4 million cars and trucks it sold in North America last year. That compares with $1,472 for Toyota a year earlier. With lackluster models, its U.S. car and truck market share fell from 28% in 2003 to 27.2% in 2004. It could hit 25% by the end of the decade, says CSM Forecasting. Soon after, Toyota Motor Co. (TM ) could supplant GM in worldwide sales leadership. GM says its ranks of retirees will begin to thin in five years, gradually easing at least that burden.

”For now, though, GM heavily relies on its finance arm, which kicked in 80% of total profits last year. And that explains why a reassessment of GM’s creditworthiness is such a threat. After Devine’s heads-up about profits, the Standard & Poor’s rating agency (which, like BusinessWeek, is owned by The McGraw-Hill Companies (MHP )) issued a warning about GM’s outlook, which it said was ”stable” after a downgrade to BBB- in October. Investors took that as a hint that a downgrade to junk status may be in the offing. A junk rating would limit GM’s access to capital, since many fund managers cannot buy junk bonds, and would raise the cost of any unsecured debt GM or GMAC tried to issue.

”Any downgrade could raise GM’s borrowing costs, cutting into profits on its lending business. To get around that, GM is already selling more loans to investors. But that will cut into long-term profits. Without a boost in auto earnings, that jeopardizes the parent company’s goal of earning $10 a share, or $5.7 billion, in the next few years.

”How bad could things get? GM’s big retiree handicap and lower-cost competition has prompted some speculation that its only solution would be to follow steelmakers and airlines into bankruptcy. No one who seriously follows GM’s finances sees that as an option, though. GM is solidly profitable, has too much cash — $24 billion — and has more liquid assets that could be sold in a crunch than do, say, airlines.

”But it’s also clear that Wagoner’s strategy of buying market share with steep discount pricing — while making up the difference on the finance side — has GM treading water. ”GMAC will make money, but not as much,” says Morgan Stanley (MWD ) analyst Stephen Girsky. ”In the long run, the auto company has to make money.”

”GM is counting on new models of its big sport-utility vehicles and trucks to pick up the slack. They’re going on their seventh year without a total redesign, which is why some models needed $5,000 rebates at the end of last year. New Chevrolet Tahoe and GMC Yukon SUVs won’t arrive until early 2006. New pickups come later. If the trucks sell well enough to cut $1,000 in rebates, it is worth $1.4 billion in pretax income.

”But in the meantime GM still has too much factory capacity. It faces sharp new truck competition from Toyota, Nissan (NSANY ), and Hyundai. Costs of raw materials are soaring — its steel bill could rise by $500 million this year, says UBS (UBS ) analyst Robert Hinchliffe. And GM may have to cough up more than $1 billion to wriggle free of its ill-fated investment in Italian carmaker Fiat (FIA ). GM’s auto business still generates cash, but it has slowed dramatically, from $10.2 billion in 2003 to $4.2 billion in 2004. This year, Devine says, cash flow will be just $2 billion.

”What worries investors is that any improvement on the auto side may not arrive in time to head off a credit downgrade. That’s why GM executives are working feverishly to safeguard finance. A separate mortgage subsidiary would likely get its own credit rating, since its business is not related to autos. And it would feed profits back to GM in the form of dividends, just like GMAC does now. Separating the mortgage business from GM should give it a higher credit rating. But GMAC Chairman Eric Feldstein argues that even if it kept GM’s current BBB- rating, the mortgage unit would probably get lower borrowing rates. That’s because GMAC already carries a sort of GM penalty — its borrowing costs are actually one percentage point higher than those paid by companies with similarly rated debt.”

.. and on and on.

I’ve taken your proposition intact, unlike the way you cherry-picked brand quality versus vehicle quality (and, of course, ignored Toyota’s crap showing last year).

EW, I did not cherry pick. I simply went to their website, looked at their current data, and repeated it. Their format did not allow cut and paste–if it had, I would have done that. There is undoubtedly more there. I’m not going to carry their website over here and quote it to you. But if you are a member/subscriber, please feel free to check it out. Go with whatever measure you wish.

And to anyone who thinks nationalizing the auto industry is a good idea…