By on November 5, 2009

Biding his time---and our money.

Transparency. It’s what GM CEO Fritz Henderson promised taxpayers in sworn testimony in front of Congress, post $52 billion bailout (and the rest). As TTAC pointed out previously, bullshit. After not releasing the dead dealer list promised to Senator Jay Rockefeller, the nationalized automaker is now proud to announce that it’s beating its targets—without revealing the targets. “General Motor Corp. is outperforming the targets set in its earnings viability plan outlined in April, CEO Fritz Henderson said today,” Automotive News [sub] said today. “Henderson declined to list the areas in which GM is outperforming but said the company would provide details in its third-quarter earnings report later this month. ‘I’m not going to get into whether we’re generating cash or not generating cash, but I would certainly say the situation is more stable than what the outlook was even just two months ago.'” And why should we believe His Opaqueness?

By his own admission, the answer certainly doesn’t include Henderson’s prognosticating skills.

“We didn’t know what was going to happen when we went into bankruptcy. Some might argue that we set the bar exceptionally low.”

Interesting. WHAT BAR? What targets did GM set? You know, specifically. Oh right; Henderson declined to say. So . . . what about that GAO reports that said GM would have to walk on water to achieve an 2010 IPO?

“They [theoretical investors] are going to get a return based upon principally the ability to generate value in the stock,” Henderson said.

Henderson said he is confident in GM’s ability to repay the $50 billion in financial support to the U.S. government. He said GM has a greater ability now to generate value in its stock than it did in the past because it has a stronger balance sheet and fewer liabilities such as health care expenses.

Henderson said: “It’s my fervent desire to show that the report was wrong.”

As the old expression goes, if wishes were horses beggars would ride free. Or something like that.

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19 Comments on “GM CEO Fritz “Transparency” Henderson: We’re Beating Secret Targets...”

  • avatar

    RF, greetings from a friendly GM employee.

    Give Fritz a chance to report earnings later this month, please.

    In the meantime, in my opinion, one target GM is beating is sales. Remember that the goal, as stated in the bankruptcy court files in the Viability Plan 4, was an 18% market share in a 10 million per year market.

    GM September sales were 156K, and October sales 177K. These sales are above the BE point of 150K.

  • avatar

    Par for the course here for GM, I’m not surprised.

  • avatar


    GM’s pre-C11 viability plan predicted/promised that GM would have a 19.5 percent share in 2009, with that share stabilizing just under 19 percent (18.4 to 18.9 percent) in “subsequent years.”

    It is certainly true that GM’s October market share rose above that target (21 percent-ish). But for how long? And at what cost? GM spent $4,100 per vehicle last month.

    Lest we forget: blowing bubbles is what GM does. All the previous toe tag sales didn’t stop the company’s market share from its terminal glide path.

    GM’s viability plan also predicted/promised that the nationalized automaker would reduce its North American structural costs by 25 percent, from $30.8 billion (2008) to $23.2 billion (2010).

    Woo-hoo! C11 has its privileges. BUT—as I’ve said to my wife many times, if you save enough money at the stores we’ll go broke.

    Fritz’s coynessosity on the cash burn front indicates that he knows the truth: the cash burn isn’t everything. It’s the only thing. GM went belly-up by not taking in as much money as they spent. Until and unless that occurs, well, the federal trough is the only possible answer to the question “how do we keep Christy Garwood gainfully employed?”

    The wider point is this: why is Henderson blowing smoke up our fundament ahead of those results? Either tell us what’s going on or don’t. As I own the company, I cast my vote for full disclosure.

  • avatar

    Christy Garwood

    You say GM sales are “above breakeven point”.

    Can you clarify if that’s BE with $4,500 cash on the hood as sweetners?

    Can you clarify how much of that is US taxpayers money?

    Can you clarify if you can reach BE without $4,500 on the hood?

    All in the interests of “transparency” mate. And while we’re at it, can clarify when Fritz has it in his plan to be transparent or is transparency going to be delayed too to keep everything opaque!


  • avatar

    I’m still struggling with the idea that Steve Rattner made such a brilliant move by firing Rick Wagoner. What changed?

  • avatar

    No matter what we perceive or think GM’s next move will be, the one I’m interested in is are they going to go back to Washington for more cash.

    If they get it, why?

    If they don’t, what?

    Time will tell…

    I’m tired of this debate. Let’s all get together a year from now and see what’s going on.

  • avatar

    Fritz won’t get into whether they’re making money or not! I guess under a socialist regime that’s normal, who needs profits, right? Disgusting.

  • avatar

    Fritz still thinks he’s talking the stock price up, for the day-traders and Wall Street gamblers, a-la Enron.

  • avatar

    I’m with Pete. More smoke and mirrors to convince would be investors, err, gamblers and GM employees, that GM stock will be worth more than Kirkland baby wipes.

    Maybe he’s not so delusional and knows something the rest of us don’t but this sure reeks of cart before horse syndrome.

  • avatar

    Captions left to right:

    “I have a clean shot at the back exit.”


    “You’re going to buy a Toyota?”

  • avatar

    A few thousand sales with rebates over break even? How many decades of this will it take to pay us back our 50 billion? Oh, and the pension obligations. And the declining economy nobody wants to admit to. And bankrupt California has how many people able financially to buy cars in the next 5 years? Did anyone factor in the devaluation of the dollar? Didnt think so. How many factories will pack up and move out of the country next year? HOW MANY AUTO MANUFACTURING PLANTS WILL MOVE TO BRAZIL, ETC? Fritz, we’re waiting…

  • avatar
    Via Nocturna



    I chuckled heartily.

  • avatar

    As a retired GM hourly, I have to side with Christy G on this one. Lets have a look at the earning results at months end.

    That being said,RF is correct on this “cash burn thing” All the plans, and numbers, and charts,don’t mean squat,if ya got no cash. I’m sure that Mr Henderson will at least touch on the “how much dough have we got stashed”? question.

    IMHO, The American,and to a lesser extent,the Canadian governments/ taxpayers are not going to stomach anymore auto company/auto worker bailouts.

    “Glass half full” guy that I am. After four years of bad news,me thinks that we should hear some good news,at quarter end.

  • avatar

    Bottom line is did they make any money? Ford made money last quarter. Sales mean nothing if your giving them away.

  • avatar

    Robert, in my opinion, Fritz’s comments were specific to the interview with AN regarding the discussion of cash burn or generation. I would be interested in your opinion of how transparent GM is AFTER the financial report is made public. I have no idea what will be made public, but at the very least, my guess is that there will be a traditional financial profit/ loss statement.

    RE: structural costs, GM has been transparent in saying that the full effect of those reductions will not occur until 12/31/09, after the last plant is closed and the workers there are let go.

    Spanner77 and all, in terms of GM’s profit/ loss per vehicle, I don’t have access to that data. Do any of you have that access for GM and other OEMs so we can do a fact comparison? Regardless of the rebate offered and the MSRP, what really matters to any OEM is the transaction price. I don’t have access to transaction price data; does anyone else and can they share it publicly?

    GM has not announced the specific date in November when they will release financial data. Historically, it has been about a month after the end of the quarter. New GM emerged from bankruptcy on July 10, so the end of the first quarter of the new GM would have been October 10. New GM will more than likely share its financial report with the feds in D.C. and Canada (since those gov’ts. are the primary shareholders) prior to making it public. Your guess as to how long this review takes is as good as mine.

    Finally, consider this regarding taxpayer funds being used to save GM and Chrysler: the US gov’t does not have a balanced budget, it has borrowed and printed (electronically) money for TARP and the economic stimulus package, so where is the bailout money really coming from? Loans from China? Devaluation of the dollar? Future taxpayers? All of the taxes GM and Chrysler employees paid to the US and Canadian governments prior to bankruptcy?

  • avatar

    And I’m proud to report that I’ve met or exceeded all of my private benchmarks for dating supermodels.

  • avatar

    So let me get this straight, the company set some internal goals. Goals it would like to keep private, or release them at an earnings call. I guess most of you don’t work for corporations, but mine implements quiet periods where we can give no specifics on any data. I am pretty sure that many others do the same.

    So instead of actually seeing an earnings report, why not criticize the fact that he isn’t saying exactly how well the company is doing.

    The pre c11 plans don’t really matter. Only the current plans really do. Also, for the $4100 incentives, realize that it was truck month for Ford and GM. For October, F150 and Silverado were the two top selling models. Large incentives when selling more expensive, and more profitable vehicles doesn’t really matter if it is profitable.

    Don’t get me wrong, I am not sure if GM is profitable right now or not. That may not be the goal just yet. Getting costs inline is probably the first goal from the balance sheet prospective. Winding down plants has a big impact on that.

  • avatar

    Actually Steven02, anyone that read the article would understand why GM’s incentive levels seemed high last month (assuming they take Fritz’s word for it)

    “On U.S. incentives, pickups are a big driver of the discussion. We built ’09 pickups longer for technical reasons. … I think that certainly we will see some moderation in incentives on the ’10s as we clear out the ’09s. …The other thing is that we are, as we reduced the inventory, we lowered the water level in so much of our inventory that (what) was remaining over aged. And, we are aggressively clearing out the over-aged stock which is a good thing to do. But it does take some money. And, it is funny when you think of it this way, if you ran 900,000 units of inventory and 30 percent of it over aged, then, you have 270,000 units of over aged inventory. When you run 400,000 units of inventory, that over age(d) (inventory) unfortunately, didn’t diminish per rate. We are aggressively progressing. These (are) vehicles greater than 90 days and 120 days in the lot. Those two thing(s), over-aged (inventory) as well as pickup trucks, are what is driving the incentive levels reasonably higher. Higher than what we with like them to be today.”

  • avatar

    Exactly SkiD666. I was just pointing out to Robert who was saying that the higher value market share came out of incentives, which it might have. I was just saying, the incentives were mainly on trucks and not that big of a deal. There is a lot of margin there.

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