What's Wrong With This Picture: The Case For GM's IPO Edition

Edward Niedermeyer
by Edward Niedermeyer
what s wrong with this picture the case for gm s ipo edition

Will the North American market for cars go up 45 percent in the next four years? I’m not convinced. Certainly the momentum hasn’t shown up yet. But this slide is from GM’s “Global Business Conference” which the company is holding in Michigan this week to drum up support for its forthcoming IPO. So… a little over-optimism is hardly surprising. But we’re not the only ones skeptical of GM’s ability to take flight as a public company. Automotive News [sub] reports that

Mirko Mikelic, a fixed income portfolio manager at Fifth Third Bank in Grand Rapids, Michigan, said he expected GM to face grilling about the risks of a return to recession in the United States.

“There’s concern about a double dip out there. That’s probably the biggest thing that’s weighing over GM coming to the market because that’s going to keep (auto sales) down for another year or two,” he said.

Check out the complete presentation in PDF format here, and decide for yourself if The General is worth an investment. The slides after the jump are certainly more convincing…

Luckily GM doesn’t have to rely completely on the US market… and it’s definitely the best-placed US automaker in key growth markets. No wonder its IPO fundraising is taking such an international tack.

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3 of 7 comments
  • Cmoibenlepro Cmoibenlepro on Jun 29, 2010

    45% in 4 years means an increase of 9.7% per year. Is it me, or are they over confident?

    • PrincipalDan PrincipalDan on Jun 29, 2010

      GM never seems to ask itself the question: "How do we make money in a shrunken market?" They always seem to just confidently proclaim: "We'll make money by selling ___ million more cars next year! Ignore the fact that our marketshare has been shirinking even in good times!"

  • CarPerson CarPerson on Jun 29, 2010

    The total U.S. market growth is more likely to be fits and starts with last year’s numbers to be about the mid-point. Also likely is General Motor’s continued market share erosion. They had better be able to show they can consistently show a profit at 75% of last year’s numbers or they are just burning through the government’s money with another nasty surprise when it's gone. Seeing their top cars at 12 of 15 and 19 of 20 in the August 2010 Consumer Reports list of family sedans doesn’t cut it.

  • Analoggrotto The factory is delayed due to an investigation of a peter puffery ring lead by VoGhost, Tassos, EBFlex a Civic Type-R
  • FreedMike Looking forward to the protests at the factory accusing Toyota of excessive woke-ism. First, EVs...next, grooming.
  • MrIcky I remember when Gladiators came out and everyone was shocked at how expensive they were. Now all the off road specials have caught up or passed it financially. I like this truck a lot, but I'd still take my Rubicon over this. I'd take this over the Ranger Raptor or Tacoma TRD though. When I found out the increase in track for the new TRD was just wheel offset-I knew they were just phoning it in. Why spend so much R&D on those stupid seats when you could have r&d'd longer arms or a front locker.
  • Alan Hmm, I see a bit of politicking here. What qualifications do you need to run GM or Ford? I'd bet GM or Ford isn't run by experienced people. Anyone at that level in an organisation doesn't need to be a safety whip, you need to have the ability to organise those around you to deliver the required results.
  • Alan That's about $74k AUD, seems like a good price for the vehicle of this calibre. I think the Ranger Raptor will start around the $78k mark here. A friend of mine just bought a W580 Amarok for $97k. Nissan have the Navara Warrior which is cheaper, I think it starts in the high $50s. The cheapest is a Chinese iteration of one of these off road tuned vehicles starting in the $40s ($29k USD). But all of the above vehicles are not equal. I would think the Raptor is by far your best bet for an off roader.