Seeking Alpha

Recalls at GM shouldn't affect ratings says Fitch

  • "We believe the company's cash flow and cash position will allow it to weather these challenges," says Fitch, noting the total estimated cost of the recalls of $1.3B compares to $38B in year-end liquidity. "However, over the long run, the recall may result in reputational damage that could result in a sales decline."
  • General Motors (GM -3.5%) currently has a BB+ rating with positive outlook at Fitch.
  • GM's decline today puts it 21% lower YTD and near its lowest price in a year.
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Comments (9)
  • funfun
    , contributor
    Comments (3343) | Send Message
     
    Hmmm…Didn't some of these New York City rating services say the same thing, same reassuring "comfort" language about Bear Stearns and Lehman Bros?

     

    …funfun..
    11 Apr 2014, 04:40 PM Reply Like
  • sugarsail1
    , contributor
    Comments (113) | Send Message
     
    except GM sells cars, not ephemeral securities...and their sales are up. GM a steal at these price...buy them like you stole them because you did.
    11 Apr 2014, 05:34 PM Reply Like
  • funfun
    , contributor
    Comments (3343) | Send Message
     
    General Motors may sell vehicles, not securities, but those cars and trucks are under a huge black cloud and depreciating quickly. Can you imagine the resale value in coming months of a deadly designed CoBALK or Chevy NO Cruze with its potential for front axle fracture and failure. GM Senior Management and their inept and dishonest engineers have indelibly stained the reputation of this now thoroughly corrupt motorcar company. Severe reputation damage, we might add, which repels not only investors, but more importantly in the future, would be buyers.

     

    …funfun..
    11 Apr 2014, 08:11 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (9719) | Send Message
     
    I wish more people would confuse GM with Lehman so I can accumulate more shares at even deeper values!
    12 Apr 2014, 09:27 AM Reply Like
  • 1980XLS
    , contributor
    Comments (3333) | Send Message
     
    Getting owners of 8-10 year old used cars back to the dealer, while they may have previously only been used car buyers is good.

     

    Could generate some new car sales.

     

    It's all bullish
    11 Apr 2014, 04:51 PM Reply Like
  • King Rat
    , contributor
    Comments (881) | Send Message
     
    As cynical as that sounds, you may be right. Most people are too numb to care that the same person trying sell them a new car promised that the old car was safe. Of course if it were you I guess you'd trade up for a motorcycle.
    11 Apr 2014, 05:14 PM Reply Like
  • Budavar
    , contributor
    Comments (1389) | Send Message
     
    Please enlighten = can Fitch be sued for market losses
    as/when GM stock swoons some more?
    PS
    Fitch claims GM had $38 B "liquidity" at end of 2013.
    Has Fitch audited that figure?
    How much is it NOW?
    PS
    If you keep looking into the rear view mirror, you may well miss seeing the oncoming CRASH.
    11 Apr 2014, 05:29 PM Reply Like
  • Budavar
    , contributor
    Comments (1389) | Send Message
     
    Further to my previous note:

     

    Fitch further claims (I just noted) the estimated cost of all the recalls at $1.3 B.
    Again, is Futch is relying on GM for that figure?
    Did Fitch actually audit that figure?

     

    How can a responsible outfit like Fitch dare to estimate the cost of all the GM recalls as of to-day?

     

    Again, please enlighten = is Fitch taking on some serious liabilities for not changing GM's credit rating as of to-day?
    11 Apr 2014, 05:36 PM Reply Like
  • 1980XLS
    , contributor
    Comments (3333) | Send Message
     
    GM
    massive short squeeze next week.

     

    Shorts are toast

     

    Motor Tend short squeeze of the year

     

    Why not?

     

    GM has won just about every other award the last 2 years.

     

    Safety, quality, Crash tests, sales gains, MPG

     

    JD Powers, Consumer Reports, IIHS crash tests, More 5 star ratings than any other, #1 in China (just today) The list goes on and on.

     

    Might as well roast the shorts too.
    11 Apr 2014, 08:23 PM Reply Like
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