Wednesday, 16 November 2005

What’s good for the country is good for General Motors, and vice versa

So said Charles E. Wilson when president of General Motors.

At the time of writing, the stock market valuation of GM is $11.89 billion. Ninety minutes ago it was $12.08 BN. So the value of America's leading car manufacturer has dropped by $190 million since I logged on. Let's say 6,000 Cadillacs! GM's value is down around 10% so far this week.

I note that the Royal Bank of Scotland is worth $91 billion tonight. Somehow, I think that things are out of balance.

1 comment:

David Farrer said...

Comments made on previous template:

David Farrer
More on GM here

18 November 2005, 10:55:40 GMT
– Like – Reply

Do you remember when La Thatch was recently in office and a banker complained to her about unfair competition from the Building Societies? You could, she said, try opening on Saturday mornings. In those days, Scottish banks did and English banks didn't, in my experience.

17 November 2005, 22:18:00 GMT
– Like – Reply

dave t
RBS make so much money because they keep taking mine for charges...well the tea and biscuit money has to come from some poor bugger!

17 November 2005, 20:11:51 GMT
– Like – Reply

Nothing imbalanced at all David. RBS have an admirable post-acquisition strategy - they don't force subsidiaries to change their names or bow before their new Edinburgh overlords. They simply trust local management to get on with it. 
GM on the other hand is an awful, arrogant, monolithic waste of time - when was the last time anyone thought that a Vauxhall was worth having? Or a Daewoo/Chevrolet? Or even a Saab? When was the last time you ever saw an appealing advert for a GM brand? Worryingly, if GM goes under it will apparently leave a debt hole behind of $2Trillion. That's the equivalent of the combined GDP of the UK and France. 
The only thing that's out of balance is that RBS is undervalued in pure P/E terms in comparison to HSBC, LloydsTSB and Barclays.

17 November 2005, 02:12:00 GMT
– Like – Reply

Alfred P Sloan
GM are reaping the rewards of generations of cowardly union-appeasing management together with a longtime failure of understanding with regard to the needs of the market. Any further financial inputs to GM would be as big a waste as sending money to Africa.

16 November 2005, 21:03:51 GMT