Fascinating to read the corporate speak in GM's FastLane blog which, as you would expect, plays down any prospect of the company going bust.
The company's Vice President, Global Communications Steve Harris says GM explored various bankruptcy options because it was asked but that it has no intention of throwing in the towel. "At the same time, we do believe that the aggressive restructuring that we spelled out in the Viability Plan – a restructuring that's already well underway – will position us not just for survival but success, once the market recovers and global auto sales reflect a stronger economy. We acknowledge the challenges and risks that face us today, but we're still going forward with our plan, we're still making the best cars we've ever built, and we're still rebuilding our company for long term viability. I know, some will say that this sounds like corporate-speak. But what does anyone expect – that we'll pick up our marbles, say "They're right," and go home? Sorry… we're planning on being around. We understand all too well the challenges we face at this time and in this truly difficult economy. But we're not giving up, we're not giving in, and we sure aren't planning on going away.
The White House, which is still considering a request for billions of dollars in more aid, is not so sure. "Whether the auto industry as we have it now is exactly what we have in a year is something I think is going to be determined by a lot of different factors," Robert Gibbs, White House press secretary told the Financial Times.
That said, I suspect that GM might be classified as "too big to fail". If GM is allowed to slide into bankruptcy, it will hit supplier companies and force them to close their doors and that will flow through to other companies that get their parts from those suppliers. We are talking here about millions of jobs and if they go, that could well trigger a global depression.
Maybe that's why some investors are hanging in there, and counting on GM's stock to rebound. GM shares have reached record lows but as Forbes reports, one investor is buying thousands of calls in the expectation that the stock will by next year rally more than 89% on Friday's price. No doubt, GM's Harris would agree.
But maybe that's wishful thinking. How much more money can the US keep investing in a company that's going nowhere? What does this mean for the employees, for the dependent companys and of course for the used cars industry?
…But maybe that’s wishful thinking. How much more money can the US keep investing in a company that’s going nowhere?
No, that is not wishful thinking, it is American thinking. That is not intended to sound simple, but real. Letting GM go is no differnt than saying good-bye to New Orleans after the flood. Why would you do that? GM is that important. Can GM alter its image, processes, debt, and vision: absolutley. It takes more courage, guts and know-how to turn it around. My vote: Think us out of it.
The how much money will US invest, never as much as it will lose.
Do the right thing, and the tough thing: make it work.