GM exits bankruptcy, vows to repay loans soon; Investors are bullish in new Schwab survey
GM exits bankruptcy, vows to repay loans soon
General Motors Corp. exited Chapter 11 bankruptcy last week, and chief executive officer Fritz Henderson proclaimed a "new beginning" for the once-mighty auto giant.
GM’s core remaining brands – Chevrolet, Cadillac, Buick and GMC – will have a total of just 34 U.S. nameplates by 2010. The emphasis on fewer, better entries will enable the new GM to put more resources into each nameplate, resulting in better products and stronger marketing, Henderson said.
In the United States, the Chevy Camaro has surged past its rivals to lead its segment, while the new Chevy Equinox, Cadillac SRX, and Buick LaCrosse are earning strong initial reviews, Henderson said. Later this year, the Cadillac CTS Sport Wagon and GMC Terrain will debut, followed next year by the Chevy Volt, Chevy Cruze and Cadillac CTS Coupe.
"Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers," Henderson said. "Business as usual is over at GM. Today starts a new era for General Motors and everyone associated with the company. Going forward, the new General Motors is fully committed to listening to customers, responding to consumer and market trends, and empowering the people closest to the customer to make the decisions. Our goal is to build more of the cars, trucks, and crossovers that customers want, and to get them to market faster than ever before."
GM, which has been kept afloat by government loans since January, filed for bankruptcy on June 1. The Obama administration committed $50 billion to GM as part of its bailout of the auto industry.
Henderson said today the company wants to repay loans "much sooner" than their due date.
"Today we launch the new General Motors, and our promise is simple. We will be profitable, we will repay our loans as soon as possible, and our cars and trucks will be among the best in the world. We recognize that we’ve been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done," Henderson said.
"To our current customers, we appreciate the confidence that you have placed in us, and going forward, we’ll offer you nothing less than great cars, trucks and crossovers, with unmatched customer service. To those who have supported us through this challenging time, we are deeply grateful," Henderson said. "And to those who have never tried a GM vehicle – or who have tried one and been disappointed – we look forward to the chance to win your business and earn your trust."
Edward Whitacre Jr., who oversaw the creation of the new AT&T Inc., will serve as chairman of the GM board with several new directors. Henderson will continue as president and CEO, working closely with Whitacre.
Investors are bullish in new Schwab survey
Charles Schwab released new survey data last week, showing that active traders are expressing renewed faith in the stock market, despite continued volatility.
The latest Charles Schwab Active Trader Sentiment survey polled nearly 260 individual investors who trade frequently. Findings include:
8 in 10 respondents (81 percent) report a neutral or bullish outlook for the market in the next six months, virtually unchanged from the last survey in February 2009.
53 percent expect the economy to show clear signs of recovery within the next 12 months.
63 percent plan to increase their trading activity in the next six months, up from 49 percent in the February 2009 survey.
Despite the recent market volatility, a majority of traders (57 percent) currently hold 30 percent or less of their long-term portfolio in cash or cash investments.
Exactly half (50 percent) of respondents believe the U.S. market is currently most attractive, followed by Emerging markets (32 percent) and Asian markets (18 percent).
Traders believe that when the financial markets start to recover, financials (40 percent) and technology (32 percent) will lead the rally.
"The latest survey results show that trader sentiment is relatively positive despite volatility in the financial markets," noted Kelli Keough, vice president, Schwab Investor Services. "We’re seeing continued confidence in active investing as traders further educate themselves, employ increased risk management and use more sophisticated trading strategies across a diverse range of investment vehicles."