General Motors next?
Sep. 15th, 2008 10:57 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
mik3capGM lost a huge pile of money last year. They're probably losing a lot more this year... their "100th anniversary employee discount" smacks of desperation. GM's a DJIA company, and 4th in the Fortune 500; if they start to fail, shit's really going to go down.
The thing is GM used to make its money from GMAC - which is to say, auto leasing. If people can't make mortgage payments, what makes you think they can make car payments? GM was for all intents and purposes a bank that gives away cars like other banks give away toasters; but last year, they sold their majority stake in GMAC in order to get enough cash to keep themselves afloat. Which was probably the smart thing to do, anticipating people not being able to make their payments and all that. But their share price is the worst it's been in decades - and really, how many more companies can the Bush Administration bail out?
The thing is GM used to make its money from GMAC - which is to say, auto leasing. If people can't make mortgage payments, what makes you think they can make car payments? GM was for all intents and purposes a bank that gives away cars like other banks give away toasters; but last year, they sold their majority stake in GMAC in order to get enough cash to keep themselves afloat. Which was probably the smart thing to do, anticipating people not being able to make their payments and all that. But their share price is the worst it's been in decades - and really, how many more companies can the Bush Administration bail out?