Let me see if I have this right… The New GM CEO knows nothing about cars, the 31 year-old, who still hasn’t graduated law school, knows nothing about the auto industry, nor has he had any real life experience, but will be overseeing this, Obama knows nothing about America, and Biden just doesn’t know anything – GIRD YOUR LOINS!

Edward E. Whitacre Jr. built AT&T Inc. into the biggest U.S. provider of telephone service over a 43-year-career. By his own admission, he becomes chairman of General Motors Corp. knowing nothing about the auto industry.

The 6-foot-4-inch Texan nicknamed “Big Ed” said steering the nation’s largest automaker after bankruptcy is “a public service.” People who know him say he can meet GM’s need for the type of transformation he orchestrated at Dallas-based AT&T.

“I don’t know anything about cars,” Whitacre, 67, said yesterday in an interview after his appointment. “A business is a business, and I think I can learn about cars. I’m not that old, and I think the business principles are the same.”

It is true that business principles remain the same, but it’s not always that cut and dry, especially in an ailing industry that has complex problems, requiring complex solutions.  If Whitacre has experience negotiating and dealing with unions then that’s a huge plus, but if not, he has some learning to do, and not a lot of time.  It’s one thing to reinvent a company like AT&T when you already know the issues and the core competencies of the company, as well as the inner workings of the industry.  It’s an entirely different thing if you know nothing about the actual product, life cycle, or process…

Here is some common sense for a second, stay with me:

I worked as a financial analyst/specialist for government contracts at a defense contractor specifically making radars and electronic systems.  I switched jobs and was doing the same financial analysis, but for biodefense products, of which I knew nothing.  My job requires budgeting, forecasting, scheduling, and analysis. therefore, I must know the process, the program, what to expect, how to fix things, you name it!  Because of my lack of experience with the actual product and the knowledge of the company’s competencies, I was not thrown into a leadership position right away.  I was given a period of orientation to understand the job and the types of programs being managed.  The basic principles of my job stayed the same, but the product and procedures were different – and it makes a huge difference.

Unfortunately, GM needs somebody that doesn’t have to have on-the-job training, but since the government is making decisions and the POTUS is currently practicing his own on-the-job training, this comes to me as no surprise.  Heck! my father who has been a GM mechanic for over 30 years could probably be a better chair.

Not to worry, GM is in good hands…/sarc

Share on Facebook

Stalin would be so proud!  The Donkey’s are controlling the cars:

There should be no question as to why the auto industry accepting the new CAFE standards today…

General Motors Corp’s (GM.N) plan for a bankruptcy filing involves a quick sale of the company’s healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.

The source, who would not be named because he was not cleared to speak with the media, did not specify a purchase price. The new company is expected to honor the claims of secured lenders, possibly in full, according to the source.

The remaining assets of GM would stay in bankruptcy protection to satisfy other outstanding claims.

GM has about $6 billion in secured debt, including a secured revolving credit and bank debt.

The government’s plans include giving stakes in the new company to GM’s union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company’s plans.

In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.

As I have been stating… we will never see our taxpayer dollars for any of this bailout nonsense.  These bankruptcies were inevitable and they just threw money down a black hole!

The government has given GM until June 1 to restructure its operations to lower its debt burden and employee costs.

Not ‘gonna happen!

If those talks failed, the company has said it would follow rival Chrysler LLC into bankruptcy.

My father mentioned yesterday, on his birthday, that he would be finding out whether or not he would have a job today… GM will follow Chrysler, the question is when and how soon this summer?

Setting up a new company to buy the healthy assets is aimed at reassuring consumers who might not be willing to make a major purchase from a bankrupt company, fearing it would not honor warranties or provide service.

The board of the new company would be established with the tacit approval of the government. Fritz Henderson, who took the helm of GM earlier this year after the government pushed out Rick Wagoner, would likely head the new company, the source said.

GM could not be immediately reached for comment.

GM shares were up about 9 percent at $1.29. (Editing by Gerald E. McCormick)

George Soros – stop buying up GM shares for yourself!

Share on Facebook

GM has confirmed that it will be unable to make its debt payments due on June 1st, 2009.  The payment due on that date is $1 billion.

It’s a debt for equity exchange, so it’ll never have to be repaid.  This is just posturing ahead of the June 1 deadline (that of course will never get extended…) to come up with a plan for viability. Trying to force the debt holders hand, as they have been the most recalcitrant in the negotiations.

There will be no ‘restructuring’ in bankruptcy court but rather liquidation…every bondholder and dealer in the world will sue.  The GOP should stay out of this.  Obama may be making his own bed with the GM/Chrysler situation.  This will not be a pretty situation and Obama’s work around trying to force the bondholders’ hands is upsetting more and more people.  He again, is making no effort to force the hand of the UAW to make concessions necessary to get the company back on track.  As we know by now, Obama is beholden to the unions, the largest of which is the UAW.  UAW’s stubbornness and corruption has now lead to the demise and ultimate loss of jobs for their people.  Congrats UAW!   I have written about GM, the UAW and GM’s mismanagement on several occasions:  Here, here and here.

GM and Chrysler will be guided through bankruptcy court by the government and since Obama and the government wanted to trade debt for equity to purchase shares of GM to have more ownership and control in the company, I can guarantee you that GM will still exist but it will literally be Government Motors and both Chrysler and GM (which will probably combine) will have government mandates flowed down to them to manufacture “green” cars.  We will probably see the Pelosi-mobile in a year or two – I wonder how well it will sell!

GM will also be closing a number of plants this summer to try and cut costs and save some money:

General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, three people briefed on the plan said Wednesday. Analysts say the company could be seeing sales decline because of talk about a potential bankruptcy.

The exact dates of the closures are not known, but the people said they will occur around the normal two-week shutdown in July when changes are made from one model year to the next. None of the people wanted to be identified because workers have not yet been told of the shutdowns.

GM spokesman Chris Lee would not comment other than to say the company notifies employees before making any production cuts public.

What’s really strange is that the stock price of GM was up yesterday.  Upon hearing such bad news one would think investors would stay far away from GM stock.  Unless of course, hedge funds are purchasing stock to only short it before GM confirms bankruptcy and files Chapter 11?  or there is always the theory that someone like George Soros or a Warren Buffet who go after failing firms buy a bunch of stock to hold ownership in it and be a part of the rebuilding and restructuring phase… anything is possible here.

I also await the outcome of a forced bankruptcy by the government to see what they do with the UAW and how they handle the pension plans of the workers ~ will we be held accountable, as taxpayers, to pay for the union employees’ benefits?

And as a side note, I’m happy and appreciative that Ford did not ask for a government bailout and waste taxpayer funds, but I also do not think that Ford will be able to make it without having to file Chapter 11 either, they are still in debt and still struggling with the UAW.  It’s unfortunate because they have some great concept cars in the pipeline.

“There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back.” Robert A. Heinlein, _Life-Line_, 1939.

Does anybody know if we will get our taxpayer money back?  The efforts were a waste and were all for naught (many of us knew that before the first bailout)… I know, I know – we will never see that money again!

Share on Facebook