GM filed for bankruptcy today. From now on, TTAC will chronicle GM’s fortunes under the series name bestowed upon post-C11 Chrysler: Zombie Watch. For there’s no doubt in my mind that GM will not recover from its federal stewardship to emerge, as Dan Neil puts it, “smaller, leaner, smarter and hungrier.” Sure, I’ll spot Dan smaller (obviously). Leaner? An efficient government-funded company is an oxymoron to rival military intelligence. Speaking of which, smarter? GM is as far from smart as Steven Hawking is from professional wresting. In fact, listening to GM CEO Fritz Henderson bleat to the press today, it struck me that the automaker is pulling a Mark Mothersbaugh: it’s de-evolving. Less obscurely, the company is actually getting stupider.
To wit: when Bloomberg asked Fritz whether there would be any changes to post-C11 GM’s corporate culture (i.e., when would someone shit-can the overpaid yes men and women who’d run General Motors into the ground), Henderson said there was no need for an executive cull. “Natural attrition” would ensure fresh blood. Well, he would say that, wouldn’t he? After all, any such overdue housecleaning would start by sweeping Fritz Henderson out with the rest of the garbage hanging around RenCen (e.g., HUMMER).
Even so, it was a stunning admission that all that talk about GM’s preparations for a government-backed renaissance—trimming dealers, reigning-in the United Auto Workers, softening-up bond-holders, etc.— was complete and utter horseshit. More specifically, Henderson was spouting the same crap GM’s been foisting on shareholders since Nikita Khrushchev used shoe-leather to pound home a point.
The truth: GM’s management still doesn’t have the slightest idea how to right the sinking ship—sorry, raise the Titanic. Henderson point blank refused to specify a deadline for a return to profitability. No goals. No timelines. Nada. If I didn’t know better, I’d think Rick Wagoner’s hand-picked clone/successor was trying to give this GM Death Watch series closure, in that “here we are at the beginning again” way. But no; there is no plan.
Now you could say that Henderson can’t formulate a plan. It’s up to the next GM CEO—the one appointed by the same presidential administration that fired the old CEO and swears up, down and sideways it doesn’t want to run GM—to devise a detailed strategy for returning some $50 billion dollars to American taxpayers. And those pesky bondholders. To which I’d reply, sure; what’s the hurry? We’re from the government and we’re here to—say, are those fresh donuts?
More evidence of increasing numb-nuttide: on this historic day, GM signaled recently dismissed dealers that they company will honor their franchise agreements until they expire (Oct. 31, 2010). Huh? If GM doesn’t terminate the franchisees before exiting federal bankruptcy, they’ll lose the chance to do so without legal repercussions. The abandoned dealers will live to fight the “new” GM in all 50 states.
In other words, even Chrysler somehow managed to get it right where GM continues to get it wrong. Of course, both automakers are missing the golden opportunity to tell the United Auto Workers to FO&D. Damn! I forgot! This is a government-sponsored bankruptcy. When the feds pull the strings, the union owns you. Literally.
Meanwhile, and lots of it, the mainstream media seems obsessed with the idea that President Obama’s minions will force the automaker to build shit boxes to appease the environmental wing of the democratic party, and, thus, drive GM into bankruptcy. Oops. I should have said “continue to suck-up taxpayer money until British Leyland looks like a winning lottery ticket.”
It’s a ridiculous concerm. Government Motors has but one goal: nothing. Remember? No deadline. No timeline. Nada. Which makes a mockery of the most important part of Neil’s post C11 prognostication: the hungry bit.
Simply put, governments are not profit-driven. At all. On any level. Ever. So it doesn’t matter what kind of vehicles post-C11 GM manufactures. At all. On any level. Ever. Snap! That makes “new GM” the same as “old GM.” See what I mean about circularity?
OK, time’s almost up. How do I see this playing out?
Either the feds will sell GM to another automaker soon, or the feds will sell GM to another automaker later. By that I mean either Renault Nissan (or someone) will swoop in “to the rescue” (for bupkis), or the public will eventually grow weary of subsidizing Government Motors. At that point, Uncle Sam will jettison the public’s shares in GM for cheap. Some strip and flipper will buy it up and do what they do best.
In other words, one way or another, GM is headed for liquidation.
I’d like to say that this is the bankruptcy I recommended four years ago, which will allow GM to reinvent and reinvigorate itself. But it isn’t. So I won’t. I’ll just say so long and thanks for all the Corvettes. Although the interior still sucks.