Breaking News: Mary Barra in as GM CEO, First Woman to Run Major Car Company

RE: "I could have easily gone for letting dead companies stay dead. The nation would have coped. We would have adapted. We would have overcome." At what cost? CERTAINLY MUCH more than the cost of the restructuring. RE: "New companies would have sprung up and taken the place of the dead ones. I hated to see Studebaker go. I loved those cars, but I'll take my Tundra, Highlander and Grand Cherokee over any of that old iron any day." Those companies did not represent systemic risk. Two new companies DID spring up. That's what Chapter 11 is. RE: "I thought GM should have been chopped up and given to China, just like Chrysler was given to Italy, along with a bribe of $1.3B." Chrysler was NOT given to Italy. RE: "But that is my point of view because I believe that out of all that something new and better would have sprang to life." Something new and better DID spring to life without the chaos of liquidation. RE: "Remember when Detroit made some awful cars back in the late 70s and 80s and all of a sudden here came the Datsuns, and Toyotas, and Subarus and Dae Woos, and other awful stuff, but people snatched them up. The industry shook itself out and righted itself to what we have today." I could go into that at length but just don't have the time at the moment. That competition was ultimately a good thing. However, I take some issue with how it happened. I was in the Toyota business in 1977 and Datsun in 1978 and remember it well. RE: "A dead Chrysler resulted in winners for Fiatsler. A dead GM could have given us quality Chinese-made cars at a price-point that is now owned by Hyundai, Kia and Nissan, especially in California." The FIAT deal isn't a "done deal" yet. RE: "Most of America did not benefit from the bailouts, handouts and nationalization, and continues to suffer from the current redistribution of America's wealth from the people who worked for it to the people who freeload." We all benefited, just not equally. RE: "I don't mind the people who earned their benefits by working for them, but the millions of people on the dole in America should tell us something. Many of them haven't lifted a finger nor are they willing to move to where the jobs are. Imagine if that had been the philosophy of the early American Pioneers. We would not have progressed west of the Mississippi." No time to go into this in detail. No one wants to pay tax money to have it go to freeloaders. But some think it is more important to cut off the undeserving and fraudsters so they cut off everyone. Recall my comment on ideologues. I used to be one. RE: "If those people who lost their jobs were keepers they wouldn't have lost their jobs." Now that's just a tad arbitrary. RE: "And hiring managers know this. That's why the unemployed need not apply for a job. Only the working ones will be considered." Before unions, there were no HR departments. The shift foreman made the hiring and firing positions. Sometimes he might be paid off. And if his uncle had a boy who needed a position, it made no difference how good you might have been, you were gone. RE: "Somebody made the hard choices there because some will feel that is heartless. It's reality." "Let 'em die on the sidewalk" is the quote that comes to mind. Ron Paul calls that "freedom." He has euphemisms for everything. There are a bunch of wannabe economists that subscribe to laissez faire free for all market economies. They can't cite a single success story of an economy that runs well using their theories. And that's all it is, political and economic theory. Its called Austrian School. Ayn Rand would be a practitioner, the Godless drug addict who ended her life on Social Security. Other followers would be Alan Greenspan and Ron Paul, my favorite. I cite small government economies like Angola and Somalia, but they don't want to claim those. There haven't been any liberals there to impose their generational dependency on the dole. AND despite no dole, things haven't improved. Let's face it. Austrian School has lost in the free marketplace of ideas. There has never been a successful Austrian School Society. Markets require rules to function. And when things get out of whack, a little government is a handy thing to have around.

I appreciate the kind words. I try not to be disagreeable even when disagreeing. Sometimes I do a better job of that than others. I sometimes get too short when trying to respond to too many posts on too many blogs at once.

RE: "The real facts are that GM Corporation is dead, it's corpse renamed liquidation motors." Thanks for bringing that up. Some people are confused by the fact that they kept the same company name and brands. It is a new corp. The BOD was flushed and the CEO replaced. Not all done perfectly, but done. RE: "A new company was formed called General Motors Company. The challenge was to create a viable new business entity and maintain the momentum of the old names and brands." The purpose of Chapter 11 BK was accomplished quite well. Even Ford was saved through the BKs of the other two. RE: "Some claim the tax credit carry forward is not typical in "traditional bankruptcies, which may be true." Yes, it is certainly true. I asked Rattner about this in kind of an unfriendly way. I also asked him about the $25 Billion of "blue sky"they arbitrarily put on the GM balance sheet when it emerged from BL in anticipation of the IPO. About the loss carry forward: "We felt it was a good move to bolster the stock price which certainly benefits the taxpayers by helping secure the viability of the new corp." On the issue of the "blue sky:" There is such a thing as "Fresh Start Accounting" which has a formula that has to be followed. I had no idea it even existed, so Rattner schooled me on this in front of about 75 other journalists. Of course, few of them knew anything about it either, but I had to be the one to act the fool at the time. I later apologized to Rattner for the tone of my question and we shook hands and have been friends since. I have a world of admiration for that guy even though I still disagree violently with some of the things they did. But its easy to second guess. If it is true, neither is it typical for the new company to take on the liability for continuing to fund pensions. In the case of the entire auto industry, this liability would have fallen on the PBGC, bankrupting the system. Since it is backstopped by taxpayers, and the cost of pension funding for GM alone was in the $100 Billion range, it would have been 5-10 times the cost to taxpayers as the loss on the stock sale has turned out. The total payback was saving $80-$100B for a $10.5B cost. BTW that number is already dwarfed by new GM capital investment in the United States. Investment that would not have occurred if the company had been liquidated. In a "traditional bankruptcy", GM pensions would have fallen on the Pension Benefit Guarantee Corporation. New GM took on a very costly liability, that would not have been traditional, in exchange for loss carry forward credits of less than half that liability, quid pro quo.

RE: "Thanks Ruggles. Fields and Farley combined frighten me. If F looks like it'll hit $23-$25, I'm outta there." I like Bill Ford a lot. I also like Mulally, but I don't give him as much credit as some. I like his sense of humility, at least that's based on his outward appearance. A good friend who knows him well speaks highly of him. Fields, we agree on. He might be bright but he doesn't seem to understand the dealers. Farley, I just don't know. I'm on the same wave length as you are on the stock, although I'm waiting for about $30. I think they will increase their dividend. still a lot of pent up demand before the next fall off. They seem to have priced in the next round of subventions which they will use when interest rates go up, IMHO. RE: "You know better than I about Reuss." I thought better of him until I heard some stuff from a reliable source. I'm still giving him some benefit of the doubt. He must be pissed Barra was chosen over him. De Lorenzo's piece says it all. I didn't find it to be so objectionable. And I don't think he was biased against Barra personally. He despises Akerson, as many do. The dealers hate both Akerman AND Reuss. RE: "Given how well most "change agents" have done at GM, he's smart to wait in the wings and see if Barra can meet her goals, keep the stock price and satisfy the BOD. If not, ta-dah!" Between Reuss and his Dad they've seen a lot of people come and go. I just hope his personality isn't what I think it might be. Its all about product and dealers. And GM has been trying to continue to bully their dealers. Same with Chrysler. I don't have a read from Ford.