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General Motors


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Some interesting data that someone pointed me to yesterday:


General Motors has a turnover of $190 billion, a market valuation of only $16 billion, a profit of about $3 billion a year, and _$300_ billion in debts.

In other words, if they were to take all their profits and start paying off their debts, at current rates they'd be debt-free around the year 2105. What makes it worse is that they have huge liabilities for company pensions: apparently in ten years from now they're expected to have two pensioners to pay for for every single employee! So each person working at the company will have to make enough money to support three people.

It's apparently become a company that's no longer run to make money for employees and shareholders, but a huge pension fund that just happens to make cars, most of which are then sold at a loss. While it might be bad if just one huge corporation like GM is in such a state, it's apparently not much worse than many other big American corporations that have been able to keep costs down for the last few decades by offering big fat stinking pensions in lieu of higher wages while people worked for them.

GM seem to be dropping fast lately, and if people come to realise that there are more companies in similar situations then the impact on the US stock markets could be huge.

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