White House tells GM boss to step down

[DGuller]

I saw Romney on TV pushing the idea that rather than the government and union keep the shares, they should be distributed to taxpayers and union members.

Apart from other reasons this won't happen, after putting in $50 billion the past few months, each income taxpayer should get about $1k in stock--the actual value would be so much less it would be a flashing neon light of how poor government policy has been thus far.

I think it's wrong to judge GM by its ability to generate profits or returns to investors.  It hasn't been about that for a long, long time. 

[The Minsky Moment]

I think it's wrong to judge GM by its ability to generate profits or returns to investors.  It hasn't been about that for a long, long time.

It also shouldn't be judged by its ability to manufacture vehicles, effectively market its offering, innovate its product, distribute its product efficiently, provide a stable work environment, manage its company benefits competently, manage its finances competently, reduce its impact on the environment, spin good public relations, or map out a coherent restructuring plan.

In all fairness, it should be judged primarily on its ability to lobby in Washington.  On that basis it is crusing right along just fine.

[Berkut]

I think it's wrong to judge GM by its ability to generate profits or returns to investors.  It hasn't been about that for a long, long time.

It also shouldn't be judged by its ability to manufacture vehicles, effectively market its offering, innovate its product, distribute its product efficiently, provide a stable work environment, manage its company benefits competently, manage its finances competently, reduce its impact on the environment, spin good public relations, or map out a coherent restructuring plan.

In all fairness, it should be judged primarily on its ability to lobby in Washington.  On that basis it is crusing right along just fine.

It is ironic that in the end it is the organization that is the worst enemy of GM, and the primary cause of its destruction, that ends up wielding the political power to "save" it.

[alfred russel]

I tossed out the $50 billion figure without looking up how much it really was--it turns out the number is more like $70 billion ($19.4 billion provided already, $50 billion bankruptcy financing). And the government has indicated that this may not be the end.

That is an unbelievable amount of money. AIG lost more, but it is easy to imagine how you can lose enormous sums when you make the decision to wager as much as you can without an ability to pay potential losses. I think an industrial company's achievement of losing so much money may stand above AIG's lofty standard.

[Caliga]

I was talking to a co-worker who used to live in D.C. and worked for some union with offices like 2 blocks from the White House (she said they were right around the corner from the AFL-CIO headquarters).  She confirmed it was run by the Mafia.

[alfred russel]

So when you stop to think about $70 billion (plus more to Chrysler)--is this really still a defensible policy? If auto demand is off by about 50%, GM & Chrysler disappearing wouldn't threaten our ability to get cars. You could do so much else with that money, including giving 1 million workers $70k. At least then the other automakers would be in better shape.

[Caliga]

If auto demand is off by about 50%, GM & Chrysler disappearing wouldn't threaten our ability to get cars.

But the other manufacturers are mostly "Japanese" 

The irony of course is that most Japanese cars sold here are built here.

[alfred russel]

But the other manufacturers are mostly "Japanese" 

The irony of course is that most Japanese cars sold here are built here.

And in our efforts to save Chysler, we are turning it over to the Italians.

[jimmy olsen]

No problem we dont want your shitty cars anyway...

Neither do we, which is why GM finds itself in this situation. 

GM sells tons of cars, it's all of it's other expenses that have destroyed it.

[Savonarola]

Hillbillies rejoice!

GM expected to keep its stake in auto racing
By MIKE BRUDENELL • FREE PRESS SPORTS WRITER • June 1, 2009

General Motors Corp. is expected to continue its long-time involvement in auto racing as the Detroit carmaker retools after bankruptcy.



A company spokesman said today he didn't expect budget cuts to GM Racing's program, which had already been scaled back earlier in the year.


GM supports teams in NASCAR, NHRA, ALMS and short-track racing. It provides marketing support and vehicles to racetracks around the country, including Michigan International Speedway in Brooklyn, where the LifeLock 400 NASCAR Sprint Cup race will be held June 14.


GM also provides cash and technical aid to race teams like Hendrick Motorsports in Charlotte, N.C., who field Jeff Gordon, Jimmie Johnson, Mark Martin, Dale Earnhardt Jr. and Brad Keselowski of Rochester Hills.


Rick Hendrick, owner of Hendrick Motorsports, spoke out on GM's bankruptcy announcement in a statement today.


"Since I was a kid, Chevy has represented the highest level of performance," said Hendrick, who runs the Chevy Impala SS in Sprint Cup. "I've never wanted to race anything else, and I have every confidence that we will continue to celebrate victories together for many more seasons to come."


Between them, Gordon and Johnson have won seven series championships in Chevrolets for Hendrick.

[Caliga]

GM sells tons of cars, it's all of it's other expenses that have destroyed it.

If GM's market share today was the same as it was in like 1970, do you think GM would be going under?

[Barrister]

So when you stop to think about $70 billion (plus more to Chrysler)--is this really still a defensible policy? If auto demand is off by about 50%, GM & Chrysler disappearing wouldn't threaten our ability to get cars. You could do so much else with that money, including giving 1 million workers $70k. At least then the other automakers would be in better shape.

I wish that were a discussion that politicians were having, but the answer isn't necessarily a foregone conclusion.

GM and Chrysler appear to be in such rough shape that without government support both would appear to be liquidated, not retsructured in bankruptcy.  The government would be on the hook for billions for honouring pensions for retired workers, since there is no ongoing business to support those workers.  The already decimated economy of Michigan (and Windsor, Ontario) would be finished off, leading to increased expenses for all manner of social services, plus the loss of tax income.  And are there national security concerns in losing your domestic automobile manufacturing capability (except for Ford)?

I'm not sure - with all that, is $70 billion worth it?

Oh, in coming to your $70 billion figure, does that include the money that Canada and Ontario are putting on the table?

[jimmy olsen]

GM sells tons of cars, it's all of it's other expenses that have destroyed it.

If GM's market share today was the same as it was in like 1970, do you think GM would be going under?

While it will likely never get back to those levels, before the latest crisis it was neck and neck with Toyota for most vehicles sold.

[Zanza]

I tossed out the $50 billion figure without looking up how much it really was--it turns out the number is more like $70 billion ($19.4 billion provided already, $50 billion bankruptcy financing). And the government has indicated that this may not be the end.

That is an unbelievable amount of money. AIG lost more, but it is easy to imagine how you can lose enormous sums when you make the decision to wager as much as you can without an ability to pay potential losses. I think an industrial company's achievement of losing so much money may stand above AIG's lofty standard.

I read that GM's total debt is $173 bn.

[Zanza]

"Since I was a kid, Chevy has represented the highest level of performance," said Hendrick,