Tuesday, December 1, 2009

GM Continues It's Swirl Down The Toilet

THERE WAS A TIME WHEN GM'S SLOGAN WAS "What's good for GM is good for America." Well, they're not exactly singing that song at the moment as they continue to chop, chop, chop workers at their plants and dealerships by the tens of thousands. And their latest strategy for success is literally robbing Paul to pay Peter: they plan to pay back the debt they owe to the government using money from the government. Huh? As an article on bloggingstocks explains:
In summary, this appears to be GM's strategy for emerging as a viable company: Borrow money from the government, convert most of it into equity, then use some of the cash to pay off the part that wasn't converted into equity -- and declare victory. Then, for the win, increase your sales by lobbying the government that already bailed you out into paying people to buy new cars, watering down the initial environmental motive behind "Cash For Clunkers."
But it appears that this little shellgame didn't impress enough of the right people since the recently appointed CEO, Fritz Henderson, has fallen on his sword as of this past weekend. Maybe it was because GM continues to tank badly - cheque kiting aside:
Analysts cautioned, however, that a successful IPO depends on the company turning a profit and financial results for the period between the end of the bankruptcy in early July and Sept. 30, showed that it lost $1.2-billion.
It didn't help that GM couldn't sell Saab and Saturn to anyone. I generally feel that the rich are stupid but there are limits. And while they're happy to toss money into a shit pit when it comes from the state - because it's mostly working people who end up footing the bill - they're generally more discerning when it's their own private capital. And while I take a certain amount of pleasure in seeing these assholes proven to be the utter idiots that they are, after so many years of stuffing down our throats the bullshit about the efficiency of markets, their idiocy is our pain:
“GM employed 200,000 people directly and they indirectly employ over one million, and then you have all the intellectual capital and skilled labor," said Sheldon Stone, head of the corporate restructuring arm of Amherst Partners. "If they were to have gone under and collapsed in the same fashion as Lehman did it would have sent tremendous shock waves through economy that we would have not have recovered from for a long, long time.”
So, don't shed too many tears for Fitzy. He'll be joining Wagoner, the previous captain of the SS Shitbox out on some Caribbean golf course, enjoying their golden pensions while GM workers have had to take a hit on theirs.
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