GM has been making good money so far that means their business plan is working
Are you serious?
Hmm lets see.
I did this post earlier today on the Fool.
Seems appropriate here.
Someone suggested leap calls as a response to the following link
(although I think they were being sarcastic).
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caranddriver.com
Right now, the executives running GM are as confident
and capable a crew as I've ever seen. Of course, the proof
will be in the new products, particularly the cars, which
need much more help than the trucks.
Lead times being what they are,
don't expect every new GM vehicle introduced over the next year or so to be a blockbuster.
But come 2004, look out.
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My Reply...
Leap calls. Yeah right.
GM's Long Term Debt over last 4 quarters
$175,490,000,000 $164,879,000,000 $163,912,000,000 $154,166,000,000
Lets look at total liabilities Q by Q
$316,276,000,000 $305,581,000,000 $304,262,000,000 $286,020,000,000
Nice trend there too.
Lets look at current debt obligations (not sure why one Q is NA)
Short Term And Current Long Term Debt
$2,183,000,000 N/A $2,402,000,000 $1,744,000,000
Hmm let's see $2B just to service debt.
Now lets consider a pension fund that is $20B in the hole.
The next $20B in profits will need to service that pension fund debt.
Finally let's consider that GM is going more in debt every day as they sell more and more cars.
Car sales are at peak levels for quite some time.
What happens when car sales go down if they can not get a grip on this debt with record all time sales?
They can be as optimistic as they want to be.
So was Berrie ebbers at worldcom.
I would suggest they are making excellent progress on the way to ZERO
with all the cars they have been selling.
BTW stevieio tells me that GM is cutting programs left and right.
Not sure there will be many new models worth a damn if this happens.
Watch what happens when the Union strikes when the contract is up.
That will be fun too. When is that contract up BTW?
Leap Calls or Leap Puts?
You make the Call.
IMO GM is GTZ.
M |
