Downtrodden General Motors (OTC: GMGMQ) is throwing in the towel on its 2010 hybrid-electric Chevy Malibu, according to a report in The Wall Street Journal (subscription required). Due to weak demand among retail customers, dealers have stopped ordering the car, and the automaker is currently choking on a backlog of the unpopular hybrids.
To drive home the point, the Journal quotes Joe Menegos, the sales manager at a National City, Calif., dealership, as saying, "We could care less" that the hybrid Malibu is being deep-sixed.
In fact, the theme for GM this week is the admission of defeat. In a press release late Wednesday, GM commented on its rising stock price, and warned investors that "any recovery for the common stockholders in the Chapter 11 bankruptcy process is highly unlikely, even under the most optimistic of scenarios."
In other words, the automaker has no clue why people are still buying its stock. (Maybe they're desperate for the tax write-off?) No matter what the motivation was for GM's recent advances, traders are finally taking the hint today. At last check, the equity was down more than 10%.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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Reader Comments (Page 1 of 1)
6-11-2009 @ 11:50AM
Hal said...
I can't beleive that our car CZAR would let this happen...
Wait until his boss finds out. Aren't we supposed to be dumping the evil petroleum based vehicles in favor of the coal fired power grid?? The GM guys will get their pay cut by the pay CZAR and be placed on probation by the Environmental CZAR only to face some other made up smartie pants liberal CZAR as the rules change every few minutes.
Is there any place on earth where common sense, intelligence and spirit survive? It isn't here
6-11-2009 @ 12:20PM
David said...
They're not selling because no body wants one. Common sense has gone out the window with the onslaught of the democrats. They should make every idiot that voted for Pelosi, Reid etc. buy one and if you voted for Obama you should have to buy 3-4.
6-11-2009 @ 1:48PM
Dan Barnett said...
Leaving aside the Republican "sour grapes" comments, GM was de-listed from the NYSE last week. Is it still trading among the "penny stocks"? When will the "new" GM stock become available?
Not surprised that no one is eager to buy a new car from a bankrupt manufacturer. Warranty, parts, and repair questions are enough to scare me away.