In the late 90’s GM stock was nearing the $100 mark. Since then it has slowly been falling – now, it sits right around $3, closing today at $3.01. It reached $2.75 just the other day – the lowest it has been since 1946.
The stock market is seeing major drops all over the place right now, so it is no surprise that GM is also down, but to see a low that has not been reached for more than 60 years is down right scary.
GM is in trouble – big trouble. It looks like they may be filing for chapter 11 bankruptcy, or possibly seeking a government bail out, but regardless, their troubles don’t end at GM, if GM folds, this will have a HUGE ripple effect that will impact… well… millions and millions.
According to a report at CNN Money, GM spends roughly $31 Billion each year on parts from more than 2100 suppliers. When you cut that cash flow, not only do you put literally thousands of businesses in the pinch, this has the effect of mass layoffs all over the US from the effected companies.
Don’t forget about all the dealerships. Apparently there are more than 14,000 struggling GM dealerships in the US. If GM has major cutbacks, or even folds, this will impact employees at all these locations. All of this will impact thousands upon thousands of people who may see layoffs or other scaled back employment, these people then spend less money (cause they have less) and everywhere their money would normally go is then impacted. The ripple effect is huge.
I’m no expert when it comes to this stuff, but I have to say, it doesn’t look too good to me – and this is only 1 of the “big 3” who are in trouble. Ford and Chrysler aren’t any better off.
Good thing I live in Canada – we are immune to this stuff… right? At least I drive an import.