Is General Motors headed for bankruptcy?

Question

With the millions of recalls, it makes me wonder, will General Motors be headed for bankruptcy in the near future?
I'm no economist or CEO but i dare say it is. I'd be keen to hear what others have to say.

Firstly the government bailout. I think it did little but to stave the bankruptcy of GM for a few more years.
If a company has to ask the Government for bailout package that tells me the company wasn't doing that well to begin with.
It would be great for GM if they didn't have competitors but unfortunately for them they do, not just Ford either but overseas manufacturers such as Toyota (i myself own a Toyota and love driving it, for no other reason then the amazing furl economy it delivers).
In business you can't just make a product (in the case of GM, cars) and expect to succeed. One, they have to be of exceptional quality (GM fail that one with the millions of recalls) and people actually have to want to buy them (again the recalls aren't going to help with future sales).

The recalls. The millions of recalls shows the lack of oversight at GM that so many cars could be so poorly made that they need to be recalled. These recalls will affect sales in two ways.
Those that bring back their cars may very well not want to keep driving them and certainly not want to buy from GM in the future, and any would be buyers would be scared off buying one now.

So can GM survive this massive amount of recalls which will no doubt affect its bottom line?

Answer 1

It's rather doubtful that the recently announced recall would result in bankruptcy. GM has disclosed that the cost is $1.2 billion. That's about 7/10 of 1% of their 2013 revenues, and about 16% of their 2013 pre-tax income. They have something like $40+ billion in equity.

Answer 2

I wish they would go bankrupt. Look at typical American car companies, Chrysler could not manage itself and was in dire need of help since no one would buy their garbage vehicles. Here comes the Italians (FIAT), buys them and is FINALLY making vehicles that people want to buy. The new Grand Cherokee and 300 is gorgeous for an American vehicle, I mean Italian. Look at GM, 20+ million recalled vehicles for an 80 cent part, typical cost-cutting American made garbage. I understand that we have to save jobs, but giving federal money to a large company that keeps producing the same garbage doesn't make sense.



Like the other poster said, with Garbage Motors, I mean Government Motors, 1.2B is not even 1% of their 2013 revenue. I doubt this would hurt GM too bad that they need ANOTHER bailout.



About quality and innovation, look at Mercury, HUMMER, Saturn, Olds, Pontiac, you call that quality?



What I don't agree with is people who want Mary Barra to step down and the people who want to crucify her. Just because she is the NEW CEO doesn't mean she has to pay for the countless mistakes of mediocre engineering made my blind engineers.



Thank you Obama

Answer 3

They already did that when Obama bailed them out, in return they moved about 70% of their production to China. I suppose the Chinese will bail them out this time ;)