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Originally Posted by YTNUKLR
Well, I assume other car companies would buy up its plant and equipment, the property would be sold, and of course, the Chinese are very interested in purchasing GM's brand copyrights (for example, they picked up "Oldsmobile" when the time limitations expired).
Currently GM's market cap is $2.4 Billion. Surely its entire durable-goods enterprise is worth more than that, in the event of a Chapter 11 BK. They do have $45B in debt...
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Why would any other car company buy GM's plant and equipment? There is a surplus of production capacity, manufacturers are idling plants not expanding them. GM's lines are designed to make GM's designs, and are not flexible.
The property isn't worth spit, relative to GM's size. GM was looking at selling its entire HQ property, that was only going to bring in a few hundred million.
They have $45BN in debt. But also $60BN in payables, versus only $9BN in receivables. So total financial obligations are really more like $96BN.
Those payables are mostly owned to parts suppliers. GM has been stretching terms on them. A lot of the parts suppliers are financially weak, some are already in BK. If they don't receive $60BN that they are counting on, how many survive? Ford and Chrysler, and even Toyota and Honda to some degree, depend on many of the same suppliers.
Parts for repairing/maintaining existing cars is a tiny business, relative to parts for new cars. The vast majority of the parts on your new car will never be replaced for the life of the car.