Should the US Sell GM Right Now?

United States of GM
United States of GM

Executives at General Motors are urging the United States Treasury department to sell its remaining shares of the once (and probably still) fledgling US automaker. The reason? Because GM claims that the restrictions (like executive pay) are making it difficult for the auto-giant to attract quality talent for its high ranking management staff. If the government were to sell its share today, with the current share price, the government would lose a total of $15 billion. For the US government to break even on the bailout, the share price would have to climb to $50 a share, more than double the current price. With a P/E of only 8.5, $50 is not an entirely laughable target, but can GM reach that target without removing the executive pay restrictions? I actually think so, and I also think it is quite ballsy of GM to even ask the government to sell its shares right now at a cost of $15 billion to the taxpayers.

I suppose at the same time, this guy at Forbes predicts GM will be bankrupt in a years time, so perhaps it is a good time to sell..

Tiny Cars for Tiny People: the Electirc Car Boom in China


The rapidly growing/developing nation of China is edging the world to the precipice of unsustainable development and at the same time promoting the development and sales of electric and plug-in hybrid cars. In order to promote this industry the Chinese Government is offering a sizable subsidy of nearly 10,000 USD per vehicle. This artificial lowering of the price coupled with the artificially high price per barrel of fuel in China is going to cause a boom in the sales and lead to a massive economy of scale in the manufacturing and sales of these tiny golf carts with doors. It’s no wonder that Warren “Big Bucks” Buffet is heavily investing in this market. This industry is going to take off like lightning even if the average Chinese driver only goes a snail’s pace of 25 mph city and 35 mph highway.

 According to the chart below, provided from the Economist, China and Europe will lead the world in the market for these highly efficient and O-Zone saving vehicles, while America will continue cowboy up to their F-150 (the bestselling car in America, despite the fact that it is a truck).  This all makes perfect sense to me; since China is full of small people ( average height 5’6″ average weight 145 lbs) they want small cars and America is full of really big people ( height 5’9″ 191 lbs.) they want really big cars to haul around their fat asses. If you want more detailed information and analysis on this subject and less sarcastic punditry and racist anecdotes, you have come to the wrong place.

The Economist

Meet the Chevy Sonic

The 2012 Chevrolet Sonic at the General Motors Orion Assembly Plant in Lake Orion, Mich
Fabrizio Costantini for The New York Times

The Chevy Sonic will be the first subcompact car to be manufactured in the United States. Some say this kind of operation can only be profitable if they are manufactured outside the US where labor is far cheaper. I say, who the hell wants to drive this thing?

NYTimes Article

Basement Rob:
“It looks like they just took spare parts from other vehicles in their line and just pinned them to this tiny frame. I smell a large marketing campaign geared toward the young and hip but an overall short life for this hot garbage.”