liquadition
If GM decides to or is forced to liquidate their stock what do you think the effect would be? Me personally I think It would be a good thing,because first of all it would mean instant cash flow for the company.Think about if you could go out and buy a new or used car at lets say 35% to 40% on a dollar there wouldn't be a car left on the lot.Which would give GM the money to restructure,which in-turn would keep people working.Just my thoughts>:chevy::flag2:
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No. Liquidation means all company assets would be sold to pay off debtors the company owes money too. GM itself would be dead; no restructure, no jobs.
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^He does have a point...
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They would then have cash from cars that they sold at a loss and then the next problem would be that they have cash but no cars to sell. And then they would not be able to sell any of the new cars that they make because they would have just saturated the market with cheap cars.
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Yeah, but the post meant the liquidation of the cars, but I hope things get better since the senate failed to pass the bridge loan. In all honesty, I think GM and Ford can get through this financial crisis, but I dont think Chrysler has a chance.
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Are you talking about Chapter 7 liquidation...or "improving liquidity".
Full-on, Chapter 7 liquidation means no GM. No GM means no restructuring, and an automotive industry meltdown. Liquidation is very, very bad. |
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Bob |
I worked at a place where the new owners didn't know a thing about what they were doing and two different owners came in and filed 2 different chapter 11's............I was working for about 2 yrs and all I heard from everyone was "Do you think we will make it"? everyday...........it got old to me so I left and found another job. The company went under 1 yr later and I that was when I knew I made the right decision. BTW, I worked there over 20 yrs and just up and left willing to work for less and now I make $20,000 more at my job now than I ever made at that job which I worked over 20 yrs at.
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It's a good idea in theory, but they're barely making a dime on cars as it is - and what they are making, isn't sustaining them adequately...I doubt cutting prices in half would have ANY positive effects for them besides helping dealers reduce inventory...which really doesn't help GM.
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Let's also not forget, there are still many cars on dealer's lots that aren't moving...
That would have to get out of the way before dealers can accept more stock even at reduced prices. |
Liquidation is normally done by the secured lenders, like the bank first, and then so on. It is true, liquidation means no GM. I am pretty sure inventory on the lot is still owned by GM, but they are paid an "interest payment" by the dealer as part of the floor plan. I am not convinced that selling off the inventory at really low prices for a quick infusion of cash will work if GM is in Chapter 11 because who would want to purchase a car they may not be able to get warranty service on, not alone getting spare parts on further down the road. GM itself is expressing this concern about Chapter 11. However, GM has retained the services of bankruptcy professionals in an effort to go through the process as a method to "tune up" the company and make it more profitable.
Long Live Camaro! (and GM) |
Most of the cars if not all were already purchased by the dealers I think...it's not like GM just gave cars to dealers to sell is it?
I know my dealer said they buy from GM and then sell the cars...no loan or anything, cash for their lot cars. If this is the case then GM would have to repay the dealers for the cuts...in turn losing more money! |
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