GM to sell Allison Transmission

[NewHummerGuy]

http://money.cnn.com/2007/06/28/news/companies/gm_allison/index.htm?postversion=2007062809

[Steve - SanJose]

Bleeding off assets like Ford, instead of concentrating on operating results and profits. Desperate measures.

[f5fstop]

Not quite as bad as Ford...yet. Ford sold all their plants to a third party and are technically leasing them back (a lease back agreement). GM is just selling off everything but their car/truck units, and getting back to the basics.
Besides, this puts the workers at Allison under a new owner, so if Allison starts to go under, GM is not responsible. (Not that Allison will be going under.)

[Desert Dan]

Why sell for $5.57 billion if Allison has sales of about $2 billion a year??

GM must need cash fast.

[Steve - SanJose]

Can't knock getting back to the basics and core business. I hope to see focus on producing the best in class automotive products. Here in high tech, the best products always prevail, other fluff is secondary.

[usetosellhummer]

Doing what they do best instead of trying to do everything a.k.a. Delphi, GMAC, etc. If I had money I would buy a load of GM stock now and be ready to retire in a few years.

[Steve - SanJose]

I'm not sure I'd want to buy too much of that GM stock...

[f5fstop]

Why sell for $5.57 billion if Allison has sales of about $2 billion a year??

GM must need cash fast.

What's the profit per year, not the sales. GM has enourmous sales but low profits. I would not say GM needs cash FAST, they have about 18 billion in case assets, and they are starting to make small profits after expenses.
What the papers around here are reporting is that GM wants to get back to its core business, making cars/trucks.

[Steve - SanJose]

GM has over $40 billion in long term debt. It costs a ton of money to service that type of debt load.

[f5fstop]

And part of that 40 billion in long term debt is retirement and GM is fully funded in their retirement requirements. In fact, they are over funded, that was in a recent article in the Detroit News or Free Press. So half that long term debt is sitting in funds they cannot touch so is it really a debt?
What amazes me is the number of people who drive GM vehicles who do nothing but condemn everyhing the company does from the vehicles it manufactures to the components of its company it sell off.
Not just here on this forum, it is happening on the Vette fourm, and probably on a dozen other GM vehicle forum.
Sure GM is selling off some of their non-core companies, but does this mean doom and gloom? I hope not, then if it does, ya'll have to start driving FJs, because if GM is gone, you can bet your sweet arses, Ford and Chrysler have already fallen.

[KenP]

I think it's great! Get back to basics. However, one would argue the opposite, spin off GM and hold onto the higher profit companies.

Frankly, it's too bad Unions have driven up the cost of business so much. The amount of money domestic manufacturers spend on labor is obsene.

[Steve - SanJose]

Yea GM does get more than it's fair share of criticism. And yes their Balance Sheet is a mess, which took years of poor management, marginal products and years of bending over for unions, etc.

Let's hope the intentions of sales like the Allison Transmission sale lead to improved focus on better products. That has only been proven on a small scale with low volume with products like the H3, Solstice/Sky, Vette and a few high volume winners like the new full size pickups. And there are several new promising cars/trucks that seem to be getting traction, but it's too early to assess their success. Too many (recent) years of GM selling rental-car-quality stuff is hard to overcome quickly.

[bparker]

I couldnt agree more, well said :beerchug:

Yea GM does get more than it's fair share of criticism. And yes their Balance Sheet is a mess, which took years of poor management, marginal products and years of bending over for unions, etc.

Let's hope the intentions of sales like the Allison Transmission sale lead to improved focus on better products. That has only been proven on a small scale with low volume with products like the H3, Solstice/Sky, Vette and a few high volume winners like the new full size pickups. And there are several new promising cars/trucks that seem to be getting traction, but it's too early to assess their success. Too many (recent) years of GM selling rental-car-quality stuff is hard to overcome quickly.