Daispy101

Why Won't GM Just Go Away?

Would the author care to comment on the lammentable position of GMAC since Cerebus Capital (who coincidentally own Chrysler), took a 51% stake in the financial arm of GM?

It is the freezing of credit markets - thanks to geniuses like the author working on Wall Street - that choked the auto-sales market. The hiking of credit score requirements (up some 20% since Q1 of 2008), and the all but impossibility of leasing finance (which is 20-30% of sales in the US) that have slashed sales. Demand is there IF people can get financing.

As for the UAW, they already conceded a lot of ground, but the real issue for GM is their legacy costs. Previous management put off covering things like pensions and healthcare costs by following the government models like social security which require a growing contributor base when their industry could only employ less people (even if GM still had its market share from the 1950s they would still choke of pensions and healthcare).

I would suggest that Seeking Alpha send the author back to do some actual research on this topic. I could recommend articles in the New Yorker, Forbes and other auto-industry magazines that have a much better grasp of the issues.