General Motors Corp (NYSE:GM - News) will likely fall below its minimum cash needs of $11 billion to $14 billion in the first quarter of 2009 if the troubled automaker does not receive additional funding, said an analyst at Barclays Capital, and GM shares fell as much as 31 percent in morning trade.
Barclays' analyst Brian Johnson downgraded GM to "underweight" from "equal weight." Deutsche Bank also cut GM to "sell" from "hold," and saw an equity value of $0 for the stock, according to a report on theflyonthewall.com. Reuters could not immediately verify the report.
"While further government assistance would decrease the likelihood of a GM bankruptcy, we believe any government assistance would likely significantly dilute GM's equity," Barclays' Johnson wrote in a note to clients.
Johnson cut his price target on the stock to $1 from $4.
"Of the four broad options for government assistance for GM, we believe that political pressure to protect taxpayers may lead to a solution similar to the 1979 Chrysler bailout, which was accompanied by concessions from debt holders, labor, suppliers and management," Johnson said.
"In any scenario, we see little value for current equity," he added.
Emphasis added by me.
Do you want to know how to save General Motors?
Fire every single person who wears a suit and tie. All of them: GO!
They have had since the 1970s -- over thirty five years -- to get their shit together.
Go read The Reckoning by David Halberstam. It's a document of how Ford fucked-up against the Japanese. (With bonus points about how we would fuck-up Vietnam by seeing Robert McNamara fuck up in his pre-Government civilian employment at Ford!)
As for General Motors, aside from trying to crush Ralph Nader, they treated their assembly workers as if they were mentally retarded children:
Case in point: the management at the Truck Plant decided what the Quality concept really needed was a mascot. Conceived in a moment of sheer visionary enlightenment, the plan was to dress up the mascot as a large cat. Fittingly, this rat-in-cat's clothing was to be called the Quality Cat. Somewhere along the line, an even more brilliant mind upstairs decided that quality cat was sort of a dull title. Therefore, a contest was organized in an attempt to give the Quality Cat a more vital name. Hundreds of crafty welders, screw jockeys and assorted shoprats immediately began clunking their heads in an effort to christen the hallowed cat. Management announce that they would reward the most creative of these entries with a week's use of a company truck. Hot damn! The eventual winner of the contest was a worker who stumbled upon the inspired moniker Howie Makem. Sadly, my intriguing entry, Wanda Kwit, finished way the hell down the list somewhere right between Roger's Pussy and Tuna Meowt.
Howie Makem was to become the messianic embodiment of the Company's new Quality drive. A livin', breathin' propaganda vessel assigned to spur on the troops. Go ahead and laugh, I know I did. Just for a moment, imagine the probing skull session that took place in some high-level think tank the day Howie was first brought to mention.
"You know, slogans on coffee cups just ain't gettin' it, Bill."
" You're absolutely right, Ted. We need something more dynamic. More upbeat."
"Hey, why don't we give the men their own kitty cat!"
"Kitty cat? Hmmm, I like it! A large kitty cat! Ted, you're a genius!"
Howie Makem stood five feet nine. He had light brown fur, long synthetic whiskers and a head the size of a Datsun. He wore a long red cape emblazoned with the letter Q for Quality. A very magical cat, Howie walked everywhere on his hind paws. Cruelly, Howie was not entrusted with a dick.
Howie would make the rounds poking his floppy whiskers in and out of each department. A "Howie sighting" was always cause for great fanfare. The workers would scream and holler and jump up and down on their workbenches whenever Howie drifted by. Howie Makem may have begun as just another Company ploy to prod the tired legions, but most of us ran with the joke and soon Howie evolved into a crazy phenomenon.
Emphasis added by me.
Can you believe it? One set of adults setting loose upon another set of adults an adult dressed in a fucking cat costume!
Take all the Suits and fire them. They wasted the company, not the assembly-line workers.
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