Don’t look now but General Motors has dropped its transmission.
That’s the story today at the automotive giant where shares of the bellwether have plunged another 15%.
As a result, the company now carries a market cap of just $3.6 billion vs. earlier highs of $52 billion only eight years ago.
So when was the last time that GM carried a market cap this puny you ask?
It was 1929 in the months before the Great Depression. (So much for buy and hold)
Of course, it wasn’t that long ago that the old saying used to be: “What’s good for General Motors is good for America”
Oh how the mighty have fallen.
Meanwhile, the news for the rest of the auto industry has only gotten worse. It may just collapse.
From Reuters entitled: Global auto market may “collapse” in 2009: J.D.Power
“The global auto market may experience an “outright collapse” in 2009 amid growing concerns around credit availability of credit and general economic stress, an influential industry tracking firm said on Thursday.
J.D. Power and Associates forecast U.S. light vehicle sales would fall to 13.2 million units in 2009 after likely settling at 13.6 million units this year, adding that a pronounced recovery is more than 18 months away.
“While the global automotive industry is clearly experiencing a slowdown in 2008, the global market in 2009 may experience an outright collapse,” said Jeff Schuster, executive director of automotive forecasting for J.D. Power.
“While mature markets are being impacted more severely than emerging markets, no country or region is completely immune to the turmoil,” Schuster said.
Now if that isn’t enough to convince you that we are already in a recession nothing is.