Filed under: Trends
Shareholder value takes a big hit at GM, Ford, Visteon, Delphi and Lear
The collective market capitalization lost by the
fabulous five in 2005 is an incredible $31.9 billion, according to a Detroit Free Press article
Saturday.The biggest losses, of course, were at GM and Ford, at $11.7 billion and $12.6 billion, respectively. And with no earnings, and little earnings upside, analysts see no reason for stock prices to rise appreciably, leaving a lot of investors holding big losses.
Telling comparisons: investors value ketchup maker H.J. Heinz more highly than GM, and video game company Electronic Arts more highly than Ford.
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Reader Comments (Page 1 of 1)
Max 4:50PM (1/01/2006)
It's too bad that '06 won't be much better.
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rip 7:16PM (1/01/2006)
considering GM has about 360 billion in debt, and can't even break even w/revenue, and its break up value is almost nothing(relatively), I'd actually give the stock a value below zero. Seems the only reason it has any value is from the brand names and GMAC. And possibly the hope that some company or the US government will bail them out. ie, basically that means the government. GMAC has value, but GM can't sell it off since its the only worthwhile asset they have. And I can't think of any automaker that would be interested in all of GM. I suppose a company like Volkswagen or Toyota might be interested in the truck, heavy truck division, but thats about it. And some bits and pieces have value, like onstar. But all the car divisions? Worthless.
I've said it before, GM needs to reduce its divisions to 3 brands, a la Toyota. Maybe even 2, Cadillac and Chevy. Reduce its model offerings to about 3 sedans, 2 coupes, 3 trucks, and 2 suv's. Basically 4 platforms. Fire all the senior management. Declare bankruptcy and eliminate all the unions. Tough decisions, but after 30 years of incompetence, tough choices are all that's left.
Of course, given the way management usually works there, they'll probably declare bankruptcy, try to liquidate, and retire, giving themselves huge golden parachutes. Either that or act like rats and just leave with fat severence packages, not even bothering with the other stuff.
But hey, its been a great short ;)
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Paul 10:41PM (1/02/2006)
this is what you get with ameicans in the auto business. leave it to the big boys in asia.
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