Auto Stocks Are Going to Crumble in 1 Hour?

It's not exactly a 9/11 shock. America has seen this coming for some time. GM still has cash to fall back on until the end of April so you might be right. Otherwise, they'll go through a constructive bankruptcy.

Definitely go Ford. If GM and Chrysler cease to exist, they'll have the lions share of the Detroit car market and become Toyota's major competitor. With it's competitors out the way, Ford could eventually go back into profit, particularly with the development of electric and electric hybrid cars.

Another thing I like is GM could get replaced with a better company in the Dow Jones index.

Better to wait for this thing to sort itself out first.

I am AMAZED that people are still posting questions about whether to buy GM or F.

I had discussed this in length many times all last year. I pointed out the public balance sheets of GM and F.

I've stated at the onset of the first bailout of the auto industry that the bailout money would not work to save the industry, and that they were only delaying the enviable.

The only thing the bailout was doing is to keep people employed (especially during an election month - Nov 2008), creating nothing more than a form of government sponsored socialism.

I have repeated said since before the 2008 election that a socialist movement in gov would not work in the USA. That is would be more costly, not more efficient.

As for GM:

GM has no cash. We knew this last November 2008 - 4 months ago. Hence, the band-aid bailout.

http://money.cnn.com/2008/11/07/news/companies/gm/...

And people, and the stock market are surprised at this? The problems never went away; they were just put on the back burner.

The US Gov realized today (03-30-2009) that if they recalled the loans to the auto industry that would force an immediate uncontrolled bankruptcy. Oh really? Just figuring out that now?

http://online.wsj.com/article/BT-CO-20090330-70002...

I stated last year (2008) that one could give a trillion dollars to GM, F and Chrysler and that does not mean that one will rush out to buy a car.

I also stated last year (2008) that the actual cost to "bailout the US auto industry" would more likely run $75 billion to over $125 billion. If one did the math we are looking at the target zone right now.

Glad to see that CNN is finally alert to this fact now too:

"Auto bailout tab could top $130 billion" (02-18-2009)

http://money.cnn.com/2009/02/18/news/companies/aut...

I also stated (2008) that the high labor costs of the auto industry relative to their foreign competitors is a big part of the problem. I cited articles from the Heritage Foundation that demonstrated this fact.

http://www.heritage.org/research/economy/wm2162.cf...

The U.S. socialistic auto industry is not new news. Let's stroll back to memory lane in 2005, and take a look at this auto industry cost structure issue again:

"GM vs. Toyota: By the Numbers" (12-19-2005)

http://www.npr.org/news/specials/gmvstoyota/

The other problem for the US auto makers?

Quality, poor design and durability.

While the US auto industry was losing money hand over fist, look was making a profit?

http://www.google.com/finance?q=FRA:NSU

"Audi Group: best-ever vehicle sales and revenue, plus record profit for fiscal year 2008"

http://www.autoblog.com/2009/03/11/audi-posts-best...

Ya think that if someone can run an auto company and have 13 years of consecutive record profits, that maybe the US could learn from that model? Granted the company says that they expect a slowdown in 2009 but still ahead of the auto curve.

http://www.ft.com/cms/s/0/442e599c-0ddc-11de-8ea3-...

Did America see this coming?

No. Most of America, or gov did NOT see this coming. How do I know, look at your 401(k) and other investment statements? Look at the trillions in gov spending, bailouts, loan guarantees, the FDIC's and the FED's balances sheets from just 2 years ago to today.

There were major red flags of serious economic issues which I have pointed out for the last 2 years on Y!A and professionally since 2004. One will have to just read my post history to see this.

GM will… not might, or maybe, or just possible, but will end up in bankruptcy, but it will be called a "pre-packaged bankruptcy" with huge US Gov financial support. I expect GM common equity to trade close to zero. The bondholders will end up with the majority of newly common stock.

Chrysler I have no confidence in. It appears their only hope is either Fiat or Obi-One Kenobi. I don't think either will fix their problems.

Pres. Obama: "The situation at Chrysler is more challenging...Fiat is prepared to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to building new fuel-efficient cars and engines here in America..."

http://www.swamppolitics.com/news/politics/blog/20...

Despite the Obama's sportswriter's ignorance, "technology" is NOT Chrysler's problem. It is lack of sales and high labor costs.

Quoting a few elections ago, "It's the economy stupid."

http://en.wikipedia.org/wiki/It%27s_the_economy,_s...

And as for the DJIA:

Of course GM, AIG, and Citi (C) (the worthless Dow stocks) are going to be booted from the Dow 30. This was discussed 3 weeks ago.

http://www.reuters.com/article/pressReleasesMolt/i...

None of this is new news. It is only being readdressed because it was not properly addressed the 1st, or 2nd, time.

The market is going to resist this interference from the government.

This is almost (1962 Kennedy) unprecedented and troubling to the Old school of capitalism. I expect a big 'get out of our face signals' from the market today.

hell yeah the us is on sale!! i been eatin all that up!! grab it homie! and if your young who cared!! throw it in wont even need it til you 55... BUY BUY BUY!! everything is on sale!!!