GM… Believer in dealing with reality?????

GM’s restructuring plan,

- Cut 21,000 jobs

- Close 13 U.S. plants

- Slash 2,600 dealers

- Eliminate $44 billion of debt

- Phase out the Pontiac brand

- Unload Hummer, Saturn and Opel

- Prayer to get much-needed concessions from the UAW.

Well it’s about time!!!!!

All the above leaves the Detroit car-maker with four brands: Buick, Cadillac, Chevrolet, and GMC. The new GM is far leaner, meaner, and de-leveraged company with at least a chance of someday being profitable. But the Business & Markets are left with a bunch of unanswered questions.

Why didn’t GM’s management come up with a serious restructuring plan like this a long, long time ago?

What kind of world was the previous management dealing with?

Why does GM even need four brands? When we know that multiple brands are expensive, confusing, and defocusing. And most carmakers have just one. A few, like Toyota, Nissan, Honda, and Ford have two - a primary and a luxury brand.

All GM needs, Chevrolet and Cadillac and a management who believes in REALITY…..

OPEC acting smart???

I was waiting for this to happen. Oil price falling from approx $ 147 per barrel (July 08) to $ 64 per barrel and they say it is still going to dip. Some say it will hit $ 50 mark.

In reaction to the falling crude oil price, OPEC decides to cut down the total oil production by 1.5 million barrels per day. But if the rational behind cutting the production to increase the demand and price, then it is difficult to happen. In fact since it began talking of curbing production, its crude oil price has dipped 11%.

Reasons
OPEC's controlling power is limited
Falling demand in today's crisis hit economies


I remember last time oil prices fell below $50 a barrel was at the end of 2006, prompting the Saudis and other producers to cut production, totaling 1.7 million barrels a day. The strategy worked then, and helped set the stage for last price run.

Today the picture is much grimmer. Demand in the United States, the world's biggest oil consumer, has fallen to the lowest level in more than five years, at 18.6 million barrels a day.

But the falling price might make sense to some of the OPEC members. Lower oil prices would likely affect Saudi Arabia's main regional rival Iran.

A period of lower oil prices might reduce some investments in alternative forms of energy that compete with oil, which are largely predicated on higher prices. This would extend the influence of producers with large reserves, such as the Saudis, and ensure the long-term role of oil in the global economy.

All send and done..... the current decline in prices could set the stage for a new energy shock when the economy and demand eventually pick up....