Apparently, the agreement ends in 2011, at which point GM may be required to contribute more cash ... to the VEBA.
The focus of cash as part of the stock value is a way analysts look at the company.
It seems like we're still kind of waiting to see if it's really going to move the needle. You guys talk about the new products and how well they're doing. I guess it's just hard to say that that's important if you can't get your overall sales up.
However, GM's estimate of a $15 billion reduction in the health-care liability, due to the agreement, assumes the agreement lasts in perpetuity.
The gap is likely to go up in the future as consumers weigh in on higher gas prices.
We think that the eventual savings from the deal will only be in the $7 billion pretax range, compared with GM's estimate of $12 billion.
We believe the odds GM management could be held accountable for accounting errors has gone up, and this could accelerate a bankruptcy protection decision that we think is inevitable.
It's likely that someone's going to try to make them pay a fuller price. That would be the right, competitive thing to do.
Copyright © 2024 Electric Goat Media. All Rights Reserved.