GM to sell Allison Transmission

[NewHummerGuy]

http://money.cnn.com/2007/06/28/news...ion=2007062809

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.

[f5fstop]

Originally Posted by Desert Dan

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.

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

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.

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