Fitch: GM Not To Go Bust Anytime Soon
While there is renewed chatter about a renewed GM bankruptcy, ratings agency Fitch thinks otherwise. The agency that assesses the chances of defaults by companies and countries raised GM’s default rating from BB to BB+, which is once notch below investment grade.
In a statement distributed via Reuters, Fitch says the better outlook reflects GM’s continued positive free cash flow generating capability, very low leverage, strong liquidity position, reduced pension obligations and an improved product portfolio.
Fitch complains that GM’s profitability is nowhere close to the levels of its strongest competitors. The efficiency of GM’s manufacturing operations and the pace of new product development needs to be increased. Fitch is worried about GM’s European losses, and thinks it will be “several years at least” before Europe stops being a drag on the bottom line. Fitch wags fingers at GM’s management turnover, and notes that the underfunded status of its pension plans remains high.
Fitch thinks that GM would burn a substantial amount of cash in a downturn, but will survive it intact.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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I hope the short sellers get routed at some point. This whole Forbes article is corrupt. They have no basis fact but are trying to drive the stock down using political sentiment. I'm a small businessman and I would be close to nothing without government. Remeber those Jews before WW2 who had no country and no country would take them in? That's why they formed Israel. Ask the Palestinians and Roma if they wished they had a powerful government.
Why do GM bashers convieniently forget about bailouts of AIG, Bank of America, and MorganStanley? Also, forget about the Iraq/Afgan war costs? Includes continuing Veterans' benefits and long term care for wounded warriors? The War is #1 major contributer to the debt.
What's going on with many websites is "cafeteria capitalism". People pick out the parts of laissez-faire capitalism that helps their favorite political parties, companies, products or themselves while rejecting consistency with those principles. The Japanese buying down the yen is one such inconsistency. "Although not a proponent of mercantilism, noted 18th century Scottish economist Adam Smith (1723-1790) was responsible for coining the term "mercantile system." Mercantilism was in opposition to Smith's concepts of free trade, free enterprise, and the free movement of people and goods. In other words, it went against the precepts of a laissez-faire economy. One of the key assertions of mercantilism is that national wealth will come through the import and accumulation of gold or other precious metals such as silver. Smith was highly critical of this theory of wealth and he clearly understood the class bias in the merchant system that supported it. In fact, Smith expressed great concern about colonialism and the monopoly trade routes instituted by the merchant class, which often worked against the economic interests of the citizenry. Mercantilism as an economic system is generally held in low regard today. Japan, however, with its structural barriers to foreign competition and its discouragement of foreign direct investment has been accused of practicing a late 20th century form of mercantilism." Read more: Mercantilism http://www.referenceforbusiness.com/encyclopedia/Man-Mix/Mercantilism.html#ixzz24cb69rqz
@highdesertcat- so, after all your bitching about how much the GM bailout will cost, it turns out you don't even pay taxes! You're not even chipping in the few bucks it MIGHT cost the average taxpayer after all is said and done. ridiculous