Government Rejects GM & Cerberus Lobbying To Finance Merger Of Two Wrongs
I can't say any of this is positive news but at least GM will now, if only temporarily, need to refocus on doing what they should be doing instead of trying to create this merger - make products people want. That is, unless somehow another option for this merger bubbles up. GM is a tremendous source of wealth and much of its business has been rationalized but now it needs leadership that actually knows how to put the pieces together and make it work. It is more than obvious Rick Wagoner isn't the leader to take GM out of this as I wrote on here three years ago. GM just reported sales down 45%. GM's sales loss is exacerbated by a policy that seems to include an end to all vehicle leasing and stricter lending standards. .
GM needs operational talent in the corner office that we have highlighted as lacking in corporate America. (The financialization of GM management has probably been the single greatest contributor to its lengthy demise. What the hell does a money changer know about making a car?) It was rumored that GM was headed to Nagoya to meet with God himself in a plea for assistance but that is now being denied. Toyota has offered GM help time and again so such an effort would be pointless anyway. The answers to GM's problems are self-evident. What GM should do is raid Toyota or Honda's executive team for a new CEO. Although finding an executive who would dishonor one of these two firms to take a post at GM is highly improbable. An alternative is to do what Ford has done. They hired an engineer steeped in strong business process methods and Toyota's quality programs who had proven operational management experience.
It's ironic that GM & Cerberus have asked for $10 billion and were turned down by the Treasury. Comparatively, financial firms have received nearly $3 trillion in government aid to date. While I am adamantly opposed to a merger of GM and Chrysler, I am not opposed to providing guaranteed loans should the industry first take the steps necessary to right their businesses. An auto industry willing to rationalize its production, produce vehicles consumers want and rationalize its product mix would likely need access to one percent of the capital being thrown at the financial economy to weather this storm.
Let me digress here for a minute. The auto makers have sustainable and sound business models. They are reeling from poor management that has been perpetuated by government meddling. This isn't a case where a financial institution has built an unsustainable business model using leveraged loans and derivatives. If GM, Chrysler and Ford were allowed to fail as some financial pinheads are advocating, the world would most assuredly see a total and sustained economic collapse. There are literally five to ten million jobs in the U.S. reliant on GM, Ford and Chrysler. Jobs that are significantly more valuable to the long term health of the economy than those of financial pinheads pushing around money made by workers employed by GM, Ford and Chrysler. Jobs that won't be replaced for decades. And, the fingers of economic consequence would be astronomical and include loss of employment by the very financial pinheads advocating such a position.
For God's sake, if we haven't learned its time to re-invest in the real economy and quit listening to these financial idiots, then we will surely witness the end of the world.
GM needs operational talent in the corner office that we have highlighted as lacking in corporate America. (The financialization of GM management has probably been the single greatest contributor to its lengthy demise. What the hell does a money changer know about making a car?) It was rumored that GM was headed to Nagoya to meet with God himself in a plea for assistance but that is now being denied. Toyota has offered GM help time and again so such an effort would be pointless anyway. The answers to GM's problems are self-evident. What GM should do is raid Toyota or Honda's executive team for a new CEO. Although finding an executive who would dishonor one of these two firms to take a post at GM is highly improbable. An alternative is to do what Ford has done. They hired an engineer steeped in strong business process methods and Toyota's quality programs who had proven operational management experience.
It's ironic that GM & Cerberus have asked for $10 billion and were turned down by the Treasury. Comparatively, financial firms have received nearly $3 trillion in government aid to date. While I am adamantly opposed to a merger of GM and Chrysler, I am not opposed to providing guaranteed loans should the industry first take the steps necessary to right their businesses. An auto industry willing to rationalize its production, produce vehicles consumers want and rationalize its product mix would likely need access to one percent of the capital being thrown at the financial economy to weather this storm.
Let me digress here for a minute. The auto makers have sustainable and sound business models. They are reeling from poor management that has been perpetuated by government meddling. This isn't a case where a financial institution has built an unsustainable business model using leveraged loans and derivatives. If GM, Chrysler and Ford were allowed to fail as some financial pinheads are advocating, the world would most assuredly see a total and sustained economic collapse. There are literally five to ten million jobs in the U.S. reliant on GM, Ford and Chrysler. Jobs that are significantly more valuable to the long term health of the economy than those of financial pinheads pushing around money made by workers employed by GM, Ford and Chrysler. Jobs that won't be replaced for decades. And, the fingers of economic consequence would be astronomical and include loss of employment by the very financial pinheads advocating such a position.
For God's sake, if we haven't learned its time to re-invest in the real economy and quit listening to these financial idiots, then we will surely witness the end of the world.
<< Home