GM Taps Last Credit Line
This GM CEO interview with CNBC is indicative of the welfare state mentality that has developed in corporate America. And, that mentality has developed due to an enormous lobbyist bubble in Washington. A bubble that has put corporate interests above those of the sovereign. Too many lawyers and idle time being the devil's playground has led to everyone living large in Washington. Not much longer. That bubble is going to pop.
To listen to this interview is very upsetting. GM has no right to any government money yet Wagoner stands behind this ruse that a bill was passed and all he is asking now is what was promised. I'm still waiting on my handout. That $25 billion Wagoner refers to is not for the Big Three. It is for innovation in the automotive segment of the economy. Right now many new car startups in the U.S. are creating jobs and leaving GM in the dust with innovative ideas. I don't really have a problem with the market receiving $25 billion to help with development of new vehicle technology but to give it to GM because they need it to survive does not help with innovation and new industry jobs. It is pure pork. Small business creates jobs in this country. GM's incompetence has probably led to more than a million domestic job losses over the years.
Wagoner tells us that GM has made the tough moves to restructure the company. With Ford, I would generally agree. With GM, I don't. I wrote many years ago that I didn't believe Wagoner was the leader to take GM out of this and I still question his ability to effectively manage a manufacturing & engineering organization. There are many issues left to address at GM. How many years does Wagoner get? I'd be willing to give him that GM is 60-70% through a transformation. After forty years of failure, that's not much of an accomplishment. As an example, GM could likely free up tens of billions in free cash flow by overhauling its global product development process. Yet, GM has already apparently done so. I'm confused. We don't need twenty mid to full sized cars in the U.S. and another twenty different mid to full sized cars sold around the globe. I don't know that the number is twenty but I'm making a generalization.
GM is so close to becoming a powerhouse company again but there is more to do and government handouts would short circuit the focus and effort the market is demanding. Personally, I would prefer bankruptcy as a method to force change as opposed to government handouts. It's time GM shareholders give Wagoner an ultimatum or gentle nudge out the door. GM is bleeding cash at a rate only exceeded by Wall Street and Wagoner had many years of a very strong economic environment to prepare GM for this moment. He has failed.
Seemingly lost in the last week is the fact that GM tapped their last credit line and that is most assuredly why GM has been so aggressive over the past few weeks in seeking government handouts.
In closing, I remain extremely bullish on the future prospects of the American automobile industry. And, a potential bankruptcy or credit crisis within GM does nothing to change that perspective.
To listen to this interview is very upsetting. GM has no right to any government money yet Wagoner stands behind this ruse that a bill was passed and all he is asking now is what was promised. I'm still waiting on my handout. That $25 billion Wagoner refers to is not for the Big Three. It is for innovation in the automotive segment of the economy. Right now many new car startups in the U.S. are creating jobs and leaving GM in the dust with innovative ideas. I don't really have a problem with the market receiving $25 billion to help with development of new vehicle technology but to give it to GM because they need it to survive does not help with innovation and new industry jobs. It is pure pork. Small business creates jobs in this country. GM's incompetence has probably led to more than a million domestic job losses over the years.
Wagoner tells us that GM has made the tough moves to restructure the company. With Ford, I would generally agree. With GM, I don't. I wrote many years ago that I didn't believe Wagoner was the leader to take GM out of this and I still question his ability to effectively manage a manufacturing & engineering organization. There are many issues left to address at GM. How many years does Wagoner get? I'd be willing to give him that GM is 60-70% through a transformation. After forty years of failure, that's not much of an accomplishment. As an example, GM could likely free up tens of billions in free cash flow by overhauling its global product development process. Yet, GM has already apparently done so. I'm confused. We don't need twenty mid to full sized cars in the U.S. and another twenty different mid to full sized cars sold around the globe. I don't know that the number is twenty but I'm making a generalization.
GM is so close to becoming a powerhouse company again but there is more to do and government handouts would short circuit the focus and effort the market is demanding. Personally, I would prefer bankruptcy as a method to force change as opposed to government handouts. It's time GM shareholders give Wagoner an ultimatum or gentle nudge out the door. GM is bleeding cash at a rate only exceeded by Wall Street and Wagoner had many years of a very strong economic environment to prepare GM for this moment. He has failed.
Seemingly lost in the last week is the fact that GM tapped their last credit line and that is most assuredly why GM has been so aggressive over the past few weeks in seeking government handouts.
In closing, I remain extremely bullish on the future prospects of the American automobile industry. And, a potential bankruptcy or credit crisis within GM does nothing to change that perspective.
<< Home