Tuesday, July 15, 2008

GM - $9 and falling...

Wow, GM just can't find a floor. Today they announced a plan to cut their dividend, cut salaries by 20% and selling assets in an attempt to raise $15 billion.

Included in this move are some cuts to health care benefits to retirees. This has long been one of my biggest complaints with the US automakers (aside from the fact they can't make a decent car). They have so many retirees living longer and longer while their base business erodes that GM and Ford have basically become large, poorly managed health care insurers that happen to make mediocre cars on the side.

If GM can bring a 40 mpg sedan to the US market in the next 3 years they have a shot at survival. If not, they seem destined to head to junk heap of past US powers like Woolworth's, Zenith and Gateway.

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