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GM shares dive amid concern over equity

Globe and Mail Update

Credit Suisse warns that shareholders could be wiped out under U.S. government-led restructuring plan ...Read the full article

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  1. Dick Garneau from Canada writes: Toyota the worlds largest auto maker lost $1.5 billion the first loss since 1941.

    GM the worlds second largest auto maker in 2005 lost $10.4 billion and in first half of 2008 lost $18.8 billion.

    Who would you invest, who is more likely to succeed?

  2. joe q. taxpayer from Canada writes: Another clear case of inducing panic and fear into the process. This 'analyst' telling equity holders they could be wiped out IF things go south, which convinces the equity holders to sell their stakes CAUSING things to go south.

    Cause and effect people, top listening to the bone heads who caused the problem in the first place. At least wait and see what kind of plan GM comes up with before deciding to pull up stakes?
  3. Mike Glatt from Canada writes: To joe q. taxpayer. The analyst is saying if everything goes as planned with a lot of sacrifices then the common equity will be worth less than $1 per share. If things do go "south" then they will be wiped out. He is only stating the facts.
  4. ernie cotez from Toronto, Canada writes: GM will survive . Not only survive but thrive . Here's to another 100 years for GM !
  5. DON BARTA from Canada writes: - Did you ever wonder if this was planned by GM as a way of getting rid of all their retirement and pension responsibilites in North America.......

  6. J. Kenneth Yurchuk from Canada writes: Has Ceraso decalared an interest in the stock? Does he hold a short position?
  7. Chris Halford from Ottawa, Canada writes: Hopefully GM will go under before any taxpayer dollars are wasted on them.

    ernie cotez - The only hope GM has is to get wiped out and into Chapter 11 protection. At which point, as DON BARTA, so accurately points out, they will ditch all their pension obligations onto the taxpayer and maybe practice some unfair competition a la WorldComm. The massively bloated GM that we see today will be gone forever.
  8. Toxic Planet from Disneyland USA, Canada writes:
    GM is history, nothing with stop the collapse, the entire automotive industry has reached the end of its lifespan. Even billions poured into the industry will amount to nothing. I can see why investors would want to bail out while they still can. If the world dies, we die, if the automotive industrie dies, the world lives.
  9. j wilson from vancouver, Canada writes:
    Go under? never! Throw some more of my tax dollars at them! Keep them going for 4 or 5 months until we're really in the middle of a depression!

    if youre giving my money away, give the money to Toyota and let them buy the bankrupt carcass and get the whole dyfunctional big three culture expunged from under those companies.

    And may I never hear Rick Wagoner's foolish yap again.
  10. Jesse Colt from Calgary, Canada writes: All the $ we dump in GM will not bring in a single sale. What if we offered a $10,000 tax credit for anyone buying a new car. This would cost the goverment $3,000 in lost taxes, but give GM a $40,000 cash input of which the government would collect at least the $3,000 lost taxes back.
  11. CallofDuty . from Canada writes: With or without the "loan"...plants are going to close and layoffs will happen. Oshawa can kiss GM goodbye because UAW will demand those jobs move back to the good old US of A.
  12. all good from Svalbard and Jan Mayen Isl writes: The customer does not buy. Next step ( 2 years from now) give the bailout money to the customer , in tax credits.
    I was joking , 2 years from now for the GM and Chrysler ( TATA Industries maybe) , will be to late.
    Our politicians are realy on something if they believe this bailout will do anything.
  13. Knuckles Muldoon from Etobicoke, Canada writes: Even if GM could build a car that sells for under $10,000, gets 100 mpg, requires minimal maintenance, lasts for over 20 years, with a 0.5% financing, I still wouldn't buy one. The unemployment rate in my house is 50% and I can't take on any more debt.
  14. Lance Marsh from Nanoose Bay, Canada writes: Re: bailout of GM and Chrysler

    Question #1: " any transaction >$125 Million..." Does this mean reporting after the fact, and 6 months down the road? They should get approval first before the transaction is completed.

    Question #2: Is there a condition in the bailout package that Detroit cannot access those funds?

    Question #3: Does a government rep get a seat on the board of those companies, until the loans are paid off?

    Just wondering....
  15. ali mansur from Etobicoke, Canada writes: GM's trading price reminds me of Air Canada before it went bankrupt. People were trading ACE up to 50 cents even though it was known the company had no value.

    Assuming GM doesn't go bankrupt, it is going to lose money for the next two years. It will then be a company about one quarter the size of what it used to be, and it would probably take another decade before it could dig out of its recently incurred debts. That's being optimistic, and I'm not even considering its existing debts.

    How anyone, anywhere could think that GM is worth any equity risk is beyond me.
  16. michael moore from toronto, Canada writes: The taxpayers' money doesn't save GM, it merely delays the inevitable crash and burn, which will burn up a lot of jobs and any trace of equity the present shareholders have. I've bought some longshots in my investing life -- even made a few bucks on Bre-X as it was in its death throes -- but I wouldn't touch GM shares now. The analyst is being charitable.
  17. ZERO percent of Canadians voted for Michael Ignatieff from Victoria, Canada writes: Did I actually read:

    enormous sacrifice of value on the part of the union and bondholders?

    After years of never backing down now the have 'enormous' sacrifces' but still make more money than most Canadians. Spare me
  18. Mikey Gault from Listening to Britney Spears, Canada writes: I'm pretty surprised to hear this since I thought GM shares couldn't go any lower. Aren't they like 5 cents now?

    Let it go bankrupt. Its more of a nursery for retirees and their mooching widows!
  19. Plain Joe from Canada writes: " Toxic Planet from Disneyland USA, Canada writes:
    GM is history, nothing with stop the collapse, the entire automotive industry has reached the end of its lifespan. Even billions poured into the industry will amount to nothing. I can see why investors would want to bail out while they still can. If the world dies, we die, if the automotive industrie dies, the world lives."

    Haha tree huggers always make me laugh. Everything is so black and white with huggers. Even a fuel efficient, low emissions vehicle does not appease a hugger. Would rather see millions unemplyed and a return to an agrarian lifestyle. Hee Haw! No thanks!
  20. Outside Thebox from Canada writes: Another example of how numbers are misused..."They (GM) are down 84 per cent on the year, but had gained 14 per cent last week".
    So, stock goes from $30 to $4.80 (-84%), to $5.47 ( 14%), this is good news? That 14% increase is 67 cents....get real.
  21. Dick Garneau from Canada writes: This bail out violated the wishes of the Congress.

    They concluded the total cost of the bail out would reach $125 billion and there would be no guarantee that one or two of the Detroit three would go chapter 11 by 2010.

    President Bush disregarded Congress then gave TARP funds that was slated for the bail out of the crashing house market. It's important that a request for $21.5 billion TART money was previously rejected.

    It's very clear the Bush wants Obama to be the fall guy, and Paulson the fall guy for TARP failure. Oh how we love politics.
  22. alix brown from Canada writes: Mickey Gault; Let it go bankrupt. Its more of a nursery for retirees and their mooching widows!

    Classy comment, especially the last two words. Ask your mom, if she is a mooching widow if she get's your dad's pension. Hopefully, I truly mean this, both your parent's are alive. But if not, you do know your mother would by your own words be a mooching widow as she would get his Canada pension.
  23. Karl T from Canada writes: Outside Thebox: what's your point? GM actually went a LOT lower than 4.85 - it hit something like 2.50 day after Congress nixed the bail out. I bought a 1000 shares at 2.85. Lucky me sold same at 4.40. You do the math. Yes, for me, it WAS good news. Thank you very much.
  24. Mark S Noel from Canada writes: Given that the governments of the US & Canada don't want GM to enter Chapter 11 or CCAA this might be a good gamble (I can't call it investing because it isn't). They will allow them the same rights as Chapter 11 or CCAA but without the investors losing their investments.
  25. Alberta didn't need Ralph from Canada writes: Hey, outside the box, your comment shows you missed the point. The article just comments on how much the stock was bouncing around which is of interest to us as it shows how wildly investors emotions are gyrating.
  26. g c from Canada writes: In 2006, Toyota Motor, the No. 2 automaker in the world after General Motors, paid its 26 top executives, including Katsuaki Watanabe, president, a combined 940 million, or $8.27 million (US). Japanese companies are not required to disclose the pay of individual executives. The pay at Toyota, announced as part of the company's agenda for its shareholders meeting, does not include bonuses. The carmaker's market value has surged 45 percent to $188 billion since Watanabe took charge in June 2005, making it 13 times bigger than General Motors, the industry leader by sales. GM cut the 2005 pay for its chief executive, Rick Wagoner, by 46 percent to $5.48 million. To illustrate some of the excess in compensation to both UAW line workers (previously discussed at ~ $35/hr wage not including benefits, pensions, etc) and GM chief executive in this example, in 2004, Mr. Wagoner's pay was probably more than the COMBINED payout of Toyota's 26 top executives ! Talk about disparity - here we have a company, Toyota, making a good product that is profitable and the public is buying, paid in 2004 their top 26, that's right, 26 executives combined, compensation equivalent to Mr. Wagoner's pay ALONE! So much for getting paid based on performance and merit. UAW workers should be take a 30% reduction in hourly wage to be comparable to Japanese automakers' US operations; and US auto execs such as Mr. Wagoner should take at least a 80% cut (sorry, you will have to survive on $1 million, boo hoo) if any of the companies consider accepting taxpayers money !!!
  27. Stew Fettes from Regina, Sask., Canada writes: The "Interventionists" can intervene in the natural schme of things all they want, but in the "final analysis" it will be "the marketplace" that decides the fate of the auto workers and the companies they work for. They can only delay for a short time, what will be the enevitable outcome of the auto industry. Auto's and trucks are just another commodity for sale in the marketplace like anything else. Over the years the UAW and CAW have been able to "leverage up" their wages and benefits through skilful negotiaions based on the "demand" for autos and trucks and the "absolue need" for the product in the marketplace, and these costs have all been passed on down to the conusmer by the auto companies. It is true that the companies "mis-directed" their efforts, and continued to build vehicles consumers were no longer prepared to buy for economic reasons, and especially fuel costs, as oil reached for the $150.00 a barrel mark. The "blame game" can go back and forth between the union workers and their respesctive companies, but it "resolves nothing". The union workers have a choice to leave their employer for greener pastures, (of which there may not be one) or sit down together and collectively workout a solution based on "todays marketplace". The sooner all costs are identified and brought into line with their "competitors", and they "find the bottom line", the quicker things will turn around for them, and a "new and more prosperous cycle" will begin for them once again. It sure must go against the feelings of all Canadians and Americans, when we are "forced to reward" incompetence, and a ludicrous business plan such as we are witnessing. It is almost incomprehensible that the UAW, CAW and their respective companies did not see this coming several years ago when they continuted to loose "market share". You would have thought someone "at the top" would have asked the question, "why are we loosing all this business to our competition".
  28. Hee Hoo Sai from Canada writes: If GM clsoes it's Canadain factories, perhaps Toyota will start making covered wagons, and the union start breeding mules, because the westward migration will be starting again.
  29. Al Smith from writes: Lot's of people crying over the auto workers' pay. Do you know that TTC (Toronto Transit Commission) ticket takers and janitorial staff make over $100,000/yr. In Ontario, prison guards make $140,000/yr. I think union auto workers are grossly underpaid.
  30. David Gibson from Hamilton, Canada writes: What kinda rubs me the wrong way is that 1.7 or 2.3 or 3.6 years from now, when these companies have gone the way of the Pet Rock, dragging down all their suppliers and seven quadrillion tax dollars, there ain't nobody will apologize, or say aw shucks we're sorry, or yeah, you're right it WAS a goonified idea....... No, I'll get no satisfaction at all from being able to recognize a greased pig rolling down a hill.
  31. David Gibson from Hamilton, Canada writes: For $1.3 M. CAD, I'd be willing to stop making these pithy, barded comments. I'll just quit completely, cold turkey. Really.
  32. david tarbuck from Ukraine writes: SUCKERS!! That is what the Canadian and Ontario Governments are making the Canadian Taxpayers!

    Canada is to put up $4billion while the US puts up $17.4billion?

    On a per Capita basis (10%)we are twice the fools of Americans while on a business basis 12-15% depending on what you count as business.

    $4billion would make a good start for a whole new industry, based on twenty first century needs, or remaking existing companies in a post Chapter 11 scenario.

    Wake up taxpayers PROTEST long and loud; Maybe it will take old shoes or over ripe produce but these clowns in Ottawa need to be given the message. If they do not listen to facts and reason, try other means to communicate; make it coarse enough to get it through their thick heades!!
  33. FOODY FOODY FOREVER from from the bottom looking way up high, Canada writes: Okay we have seen management to the tune of 16 million/yr run GM into the ground, wake up working people not the nit wit self serving MBA types but the rest of you , the workers wages are not out of line its the managers who are messing things up and ten years of sheep credit has stopped the flow of purchases, we are all over drawn instead of asking who much is that car we say whats the monthly payment , their lies the problems.

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