How's GM's Bankruptcy Going?

General Motors is expected to emerge from bankruptcy soon. What’s more, the bankruptcy court judge made it clear over the weekend that there will be no forced liquidation of General Motors when he approved the sale of assets still deemed viable to the “new and improved” GM. This should pave the way for a new stock offering in 2010.

But GM’s transformation is far from over. In a bold statement, the company told investors last Wednesday to stop investing in its stock: “There will be no value for common stockholders in the bankruptcy liquidation process, even under the most optimistic of scenarios.”

GM’s real test will begin in the coming months when the company has to show it can succeed with fewer brands, models, dealers and employees. The Chevy Volt, expected to hit the showroom floor by 2010, won’t make GM any money at $40,000–rather, it is supposed to lead the image makeover of the new GM. The company plans to sell only 2,000 Chevy Volts in 2010, but hopes to ultimately sell up to 77,000 per year after that, according to market researcher CSM Worldwide. In other words, the car that the new GM is betting its future on will likely lack the sufficient sales volume to ever make the company money!

Even after GM exits bankruptcy, the automaker will continue to be on my “dogs with fleas” list for the foreseeable future.

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