Thursday, March 5, 2009

GM on the verge of bankruptcy: ETA March 7

GM is in even worse shape than before the end of the year. They are at risk of not meeting their debt obligations and today it was revealed by their independent financial auditors that they had serious "ongoing concerns" about the General's ability to move forward to continue business.

Whenever financial guru's use that term it means really bad news. Take circuit city, and Leman Brothers, for example. Each had serious problems with cash flow and future outlook. Even BlockBuster video is close to bankruptcy. And while GM has stated they are going to get rid of four of their current brands, I think we all know it's just re-arranging deck chairs on the Titantic.

I used to be a huge GM fan. I had trucks and cars for years with them. And then one day I got tired of dealing with substandard quality. The car squeaked. My car seat springs actually broke through and poked into my back. My horn stopped working after two years. TWO YEARS. I had leaks in my trunk from water - serious leaks. My rear tail light melted and almost caught fire. Premature tire wear. And it goes on and on.

What GM needs to do is take only their best brands and dump the rest. They have to face a new reality of a bleak economy. People are not buying fancy SUV's or Escalades anymore. They want reliable, efficient vehicles. It's not rocket science folks; there's a reason why the #1 globally selling car (The Corolla) is still up there. Yes, it's boring. Yes it has no soul. But it's reliable and gets good gas mileage. And it's made with quality. To win their customers back they're going to have to get back to their roots.

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