The downfall of General Motors
Monday, February 27th, 2006By Brian Ochsner baochsner@aol.com
The mainstream media was like a bird dog chasing its tail covering the “Huntergate” story; then the “Portgate” story broke, and that became the frenzy of the week. Meanwhile the business press stayed focused on a more important matter: the struggle of one of America’s largest manufacturers and automakers, General Motors.
During most of the 20th century, GM was one of America and Wall Street’s ‘blue-chip’ companies that were good investments. However, if you examine their financial statements today like a doctor looks at a patient, you’d see a company with financial ‘cancer’ that’s bordering on being terminal. In business terms, they’re not far from declaring Chapter 11 bankruptcy, with Moody’s having cut their bond rating yet again. Here are a few reasons why GM is in such bad shape today. (more…)