Summary
The huge GM bankruptcy is the best of several bad options for America's biggest automaker. But it also imposes pain on millions who cast their lot with GM over the years. Are there any winners? Yes.
Analysis
By allowing the company to shed debt, unload its weakest assets and rapidly streamline, the Chapter 11 filing allows GM to stay in business, become competitive again and someday, hopefully, return to profitability.
The bankruptcy also gives several GM competitors a boost. here's who stands to gain the most (not including the bankruptcy lawyers):
Ford. It's got financial problems also, but GM's crosstown rival looks like it may be able to solve them without declaring bankruptcy or asking for a bailout. That puts Ford at the top of a troubled domestic heap. Forecasters predict that Ford's U.S. market share, about 16% now, could rise to 19% by 2015. A few extra points of shares could push Ford's overall U.S. sales from about 1.5 million now to 3 million by 2015.
Toyota. Japan's biggest automaker is losing money, also, but it's not in dire straits like its U.S. counterparts. With GM getting smaller and Ford moving carefully for a while, forecasters see Toyota edging out the two U.S. automakers to become the top seller of cars in the U.S. by 2011. If gas prices spike, Toyota could grow faster, thanks to its pole position in high-mileage hybrids.
Imported minicars. They could come from Korea, China or India, but the odds are rising that more cheap, small imports will make it into U.S. showrooms. One possible entry point is Saturn, the money losing division that GM plans to sell. With nearly 400 modern showrooms and a recognized brand name, Saturn could offer a foreign-based carmaker a ready-made retail network in the U.S. Roger Penske, one possible buyer, might try to sell cheap Korean cars as Saturns.
General Motors, yes, GM. The biggest beneficiary of the GM bankruptcy may be GM itself. They have good product line, they're shedding excess dealers and they're leaving ten years of debt behind. The most crucial issues for GM are minimizing the damage to its brand image, erasing doubts in car buyers' minds and detaching the surviving divisions---Chevrolet, Cadillac, Buick and GMC from the troubled parts of the company. If it does that, GM could bounce back smartly by 2011. Call it a counterconventional bet.
