love4gm

How I Plan to Trade My Depressed GM Stock

Must dispute your assessment of "A company's success is 80% to 90% based on the business it's in and 10% to 20% based on management effectiveness." That is a very superficial assertion and not fact based. The facts are fairly obvious, but missed by investors and analysts alike, simply because they lack the insight into the most accurate predictor of revenues from NA market for GM...Dealer (The true customer!) orders. BTW, ML's lead automotive analyst had GM pegged for a $28 price by July at the end of May!

Dealer orders are based on two basic premises, market demand and some seasonal adjustments. If you, as an investor, or an analyst truly want to know where the next 90 days lies for GM, Ford or Chrysler, then you need go no further than a handful of your local dealers. (Mix each manfacturer's brands and visit a few!)

Spend time asking the dealers (If you can get face time.), Sales Managers, and Salespeople what their current daily, weekly, monthly business has been like, as well as what the trailing quarterly business has been for them. This will help you gauge the overall health of the market, as well as the end-user and dealership mindsets (One is usually symptomaitc of the other. i.e. chicken/egg)

Back to point. The leadership of these giant, stoic and often callously arrogant automotive dinosaurs is stifled less by the fixed cost issues than by stale thinking at the top...period. Specifically with GM, the company wastes resources on inane committes, surveys and studies in order to guide its decision-making. It also fails to identify specific talents and acumen amongst its junior execs, preferring to create mediocre, well-rounded robots who toe the company's lines, rather than re-write them!! They spend more time and energy determining the whims and desires of those senior execs above them in rank in order to get ahead, this way they do not risk being left behind when their corporate "godfather" moves on. This is crippling these companies, more so than the issues eluded to in your post.

I hope for all of our sakes that there someone exists out there in the business community that can pull the GM ox out of the ditch. The big question then will be two-fold...Will they come from outside the insular confines of Detroit and will they be willing to take on the challenge? I suspect G. Richard Wagoner hangs on simply, because the BOD is a weak collection of his personal appointees and there are no willing takers out there! Good luck.