From peak to deep hole in nine years
By the time Rick Wagoner was named chief executive of General Motors Corp. in June 2000, the stock market seemed to know that the company’s fortunes had peaked.
GM’s shares reached their all-time high of $93.63 in April 2000. By the end of June of that year the price had tumbled to $58.06. The stock has been in decline for most of this decade, even in the bull-market years of 2004, 2005 and 2007.
GM’s sales were $185 billion in 2000 and reached a record $206 billion in 2006. But the company has been losing money on operations since 2005, weighed down in part by high labor and retiree costs and by the need to feed a bloated dealer network that thrived on GM’s gas-guzzling sport utility vehicles in the good times.
Despite paring its workforce 37% since 2000, GM’s losses have ballooned, reaching nearly $31 billion last year. The company has pinned its hope for survival on more cost-cutting and on government aid while awaiting a rebound in car sales after last year’s crash.
Wagoner, who resigned over the weekend under pressure from the Obama administration, has presided over the virtual wipeout of GM shareholders: The stock, which sank 92 cents to $2.70 on Monday after the government rejected its latest restructuring plan, is down 95% since June 2000 -- even though speculators have pushed it up from a low of $1.45 on March 6.
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