Bailout Watch 235: 20 Questions Congress Should Ask Chrysler, Ford and GM
Litigators use yes/no questions to focus witness testimony and prevent dodging, weaving and long-winded evasiveness. Here are 20 direct questions for Wagoner, Mulally and Nardelli. No doubt TTAC’s Best and Brightest have their own questions which they would like to have answered under oath.
1. Did you bring with you complete and current financial statements, including a balance sheet and financial projections?
2. Are all these financial statements and projections submitted to this committee also available to US taxpayers?
3. Have your financial statements and projections been shared with the UAW?
4. Have they been given to any of your bondholders?
5. Are your financial projections based on the “worst case” scenario?
6. Do you have other models/scenarios for financial projections? For example, is there a best case scenario?
7. Have you provided us with a written statement of all the assumptions you relied on in preparing the financial projections?
8. Did outside consultants/advisors assist in the preparation of your financial projections?
9. Based on the balance sheet presented to us, do your liabilities exceed your assets?
10. Have you spent more than $1 million in 2008 lobbying Congress for financial aid? More than $10 million? More than $20 million?
11. Have you had discussions with your largest bondholders about forgoing interest and principal payments until any taxpayer loan is repaid?
12. Have you asked any bondholders to convert their unsecured debt into common shares?
13. Have any bondholders agreed to convert their debt into common shares?
14. Have any of your bondholders formed a negotiating committee?
15. Do you intend to renegotiate your current labor agreements with the UAW?
16. Do you intend to reduce your dealer network?
17. Have you retained investment bankers to assist you in selling any assets?
18. Do you have collateral to secure repayment of any loan made by US taxpayers?
19. Do you personally have an employment agreement?
20. If your employment is terminated, are you entitled to a severance payment?
Bailout Watch 233: CS First Boston on GM Plan: "another Check Before the End of 2Q09"
• GM’s liquidity situation is dire. According to the company’s restructuring plan that was submitted to Congress on Tuesday, it looks like GM burned another $7 billion in October and November, and should be about cash flow neutral in December; making Q4 another $7b burn quarter.
• As such, GM requires $4 billion of government loans immediately, with another $4 billion in January and an additional $2 billion by the end of 1Q09.
• At the end of 1Q09, GM will have drawn $10 billion under its base case assumption, and possibly as much as $15 billion under its downside demand assumption.
• The $18b in requested funding ($12b in loans and a $6b credit line) is in addition to the estimated $8.3 billion that GM is anticipating in Government loans under the ($25b) DOE program for fuel efficient powertrain technology investments.
• One of our primary concerns here is that the downside scenario is not much worse than the current run rate of sales (about 10 million units) and would still leave GM in the liquidity danger zone (with about $13 billion at the end of March) despite having drawn $15 billion in Federal funds.
• And what happens after that? If US sales remain in the 10-12m range and GM burns another $7 billion in 2Q09 it could see its liquidity drop to only $9 billion, even after drawing the final $3 billion in Government money (maxing out at the requested $18 billion). In this case, the Government may have to write another check before the end of 2Q09.
Bailout Watch 232: CS First Boston on FoMoCo Plan: "Not Much Here"
“There is very little in the way of new initiatives/efforts/changes to improve the cost structure or profitability of the company, in our view. Most of the document submitted to the Congress is an outline of the company’s existing ‘Plan’ and actions that either have already been taken or are slated to play out over the next couple of years (especially as it relates to new product development). Ford is now calling for its existing plan to deliver profitability of at or above breakeven by 2011 at both the corporate level and in North America. On a cash flow basis, the plan is to be breakeven or above on a Corporate basis by 2011 (no mention of North American cash flow). Ford’s base case US sales assumption for 2011 is 15.5 million total vehicle sales. Following are some things that we think are lacking in the plan:
Bailout Watch 231: GM BOD Hearts Rick Wagoner. Still.
The lead outside director at GM, George M.C. Fisher, informs the NYTimes that “Rick is the right guy to lead this management team through this crisis.” Acting on the assumption that GM has any reputation left to lose, all thirteen outside directors are in agreement with the Master Accountant that “bankruptcy would ruin the company’s reputation.” Fisher and his co-directors are “pretty convinced as to the serious damage to the brand from bankruptcy.” He’s right on that score, but doesn’t touch upon whether the fact that GM has been insolvent for close to a decade has given him any pause during that period. Fisher blames the company’s troubles on the dire financial conditions that have blindsided this fine collection of managers extraordinaire – noting that the sales rate in November was the lowest since 1982.
NYT: Not Everyone In Michigan Is Pro-Bailout
As the battle over bailout bucks rages, it’s easy to get the impression that Fortress Detroit is unanimous in its support for the home team. As usual though, there’s more to the story than just the loudest voices. The New York Times conducted interviews across the state over the last two weeks, and found that opposition to the bailout, if only in private. “There are plenty of people who are rolling their eyes,” said Bill Ballenger, editor of Inside Michigan Politics newsletter. “You keep your head down if you’re one of them, but they’re out there.” And much of the opposition seems to come from Michigan residents who lost their jobs before the automakers even came begging for a bailout. “How many other, small companies would like a bailout?” asks Heather Davison, an unemployed graphic designer who lost her job at a real estate publication a year ago. “It seems to me that the car companies saw the banks getting a bailout and said, ‘Oh, let’s go!’”
Bailout Watch 230: WSJ LOLs at GM Rescue Plan
The Wall Street Journal’s Evan Newmark takes a look at GM’s Congressional bailout begging term paper. To paraphrase, “we are amused” (in a deeply cynical, bemused sort of way). More specifically, “The restructuring plan comes up short on the most fundamental question. Will this company actually make money? Just look at the details — or what details are lacking. GM says it plans to focus on only four brands. So why does the number of models only drop from 48 to 40? GM has 6,600 dealers, which it says it will cut to 4,700 by 2012. Honda has 1,300 dealers. Even Ford has only 4,100 — which it will cut further. And nowhere in the document does GM lay out, year by year, its own projected market share. This is perhaps the most critical part of any business plan. The kind of thing you learn in the first day of business school.” Yup, the WSJ gets it– in the same place the American taxpayer will… well you get my drift. More mill grist for left-brained nay-sayers after the jump.
Bailout Watch 229: Ford Back in the Black by 2011. In Theory. [Plan Below]
Back when I started the General Motors Death Watch, I had no idea that I’d also be starting a Ford Death Watch. Or a Chrysler Suicide Watch. If you’d told me that they’d all be staring down the barrel of Chapter 11 at the same time, I would have found the suggestion highly improbable. As Edna Mole said to Mrs. Incredible, “And yet Darling, here we are.” And here’s Ford’s federally-mandate bailout plan. Automotive News [sub] headlines their summary “Ford tells Congress profit may be restored in 2011,” but that’s all kinds of misleading. In fact, Ford’s plan says The Blue Oval Boys won’t be profitable until at least 2011. And the cover sheet is covered with caveats, from continued decline in market share (ya think?) to “New or increased credit, consumer or data protection or other regulations resulting in higher costs and/or additional financing restrictions.” Well, at least Ford knows what political buttons to press to get Congressional democrats behind them…
Bailout Watch 228: Chrysler to Congress: $7b by January or We're Dead [Plan Below]
Bailout Watch 226: GM to Congress: $4b in December or We're Dead [Plan Below]
As GM’s 41 percent November sales drop sinks into the public consciousness, The General’s generals have not-so-coincidentally released their not-secret bailout request. And here it is. Judging from the state of things, Rick Wagoner might need to fly to DC– before it’s too late. “General Motors said Tuesday it needs $4 billion in government loans this month and a total of $12 billion by late March to keep operating,” MSNBC reports. “Altogether, the auto giant is seeking up to $18 billion in government funding — including a $6 billion line of credit in case market conditions worsen.” Jeez, that doesn’t leave much for Ford or Chrysler! I make that $7b between them. A pittance really. Unless… they’re planning on asking for more. Could it be?
Ford and GM to Sell Corporate Jets
Bailout Watch 224: "Ford Respectfully Requests… $9b"
Ford has released its nonclassified report to the Senate Banking Committee today, as CEO Alan Mullaly escapes from Detroit in his Escape hybrid. The Detroit Free Press has posted the entire report in PDF format, and it’s 33 pages of good stuff. The big news: despite insisting that federal funds are a “backstop,” Ford is asking for more money than it did last time Mr. Mullaly went to Washington. Specifically, Ford offers three scenarios, ranging from a short-term recovery (14.5m total US market in 2010 = $5b in support), to normal (12.5m in 2010 = $9b) to short-term worsening (11m units in 2010 = $13b). Ford’s “recommended terms of the loan would be: (i) at government borrowing rates; (ii) a revolving credit line with a ten year duration; and (iii) with additional conditions consistent with the TARP legislation.” When was the last time you “proposed” your own loan terms?
Bailout Watch 256: Gary Witzenburg is Insane
Back when we TTAC didn’t have Ronnie Schreiber doggedly defending the D2.8, I contacted former GM PR spinmeister Gary Witzenburg to post an ed on the pro-Motown perspective. Big mistake. Despite– or because of– his exposure to our Best and Brightest, Gary went off the rails faster than the Polar Express. Other than an ex-girlfriend, he remains the only person I’ve ever blocked from my email. Let’s just say the man has “anger issues.” Actually, let’s not. Let’s revel in his vituperation and wonder if Autobloggreen is regretting letting him into their compound. “Here is what I’ll bet those long-suffering auto CEOs wanted to say, but couldn’t: You ignorant morons! How dare you accuse us of building cars nobody wants? We sold 8.5 million vehicles in the US last year and millions more around the world. GM still handily outsells Toyota here, Ford outsells Honda and Nissan, and Chrysler sells more than Nissan and Hyundai combined. How many of our new cars have you driven lately?” Personally, I think Gazza should have gone for the post-modern, hat tip to SNL approach, and begun with “Jane you ignorant slut.” More highlights from Gary’s take on “How to Win Friends and Influence People” after the jump.
Bailout Watch 253: Conspiracy Theorists Unite! Bailout Hearings Postponed Until Thursday
Bailout Watch 252: The Last Refuge Of The Scoundrel
Since the first mutterings of an auto industry bailout, the idea has wrapped itself in unabashedly patriotic rhetoric. Now that the battle for the billions has been joined, this nationalist veneer is reaching near-self-parody levels of earnestness. All the while we’ve been arguing that saving American jobs and saving the Detroit Three in their current forms are mutually exclusive goals. As reality slowly becomes too real to ignore, directors, representatives and pundits are beginning to acknowledge this trade-off, although you might be surprised by how they’re playing. Or, if you’re as cynical as we are, not. The gameplan comes from Mark Phelan of the Detroit Free Press, who argues that to survive, Ford and GM must “must show a business plan that’s profitable at much lower sales volume and has upside flexibility to build more vehicles and for workers to make more money with overtime. This will require plant closures and layoffs.” At home, of course. Meanwhile, Phelan argues that “GM and Ford’s greatest assets are their worldwide facilities and capabilities…
Bailout Watch 251: Volvo and Saab Now on Official Death Watch
In the run-up to this weeks bridging tournament, GM and Ford are indicating their [belated] willingness to axe ailing brands. Now you could look at their most recent sales stats and argue that this description applies to all 11 U.S. car brands under The Big Two’s umbrella, but we speak here of the Swedish contingent: Volvo and Saab. The former lost $458m in the last quarter alone. The latter, well, who knows? GM doesn’t break-out Saab’s red ink. (The brand hasn’t made a profit since The General bought it in 1989.) Anway, The Financial Times reports “Ford and GM will both tell the US Congress they have long-term plans to dispose of the brands this week when they present detailed business and financial plans to support their request for $25bn of emergency funding.” “Long-term” being the operative word; the automakers can no more cut the Swedish brands loose without C11 than you can eliminate credit card debt by scissoring your plastic. But don’t worry, the suits have a way to avoid the thorny issue of using U.S. bailout bucks to protect Swedish (German?) jobs: they’ll ask Sweden for money.
Bailout Watch 250: Sound and Fury
This is the week that the CEOs of Chrysler, Ford and GM make their second attempt at securing enough bailout bucks to stave-off bankruptcy (Ford not-so-much, but since you’re offering…). As is the way of such things, the serious “negotiations” is already going down, as politicians and supplicants prepare to posture for public presentation. Automotive News [sub] reports that Republicans have decided to focus their hypocritical ire (imagine a politician chastising an automaker for not balancing their budget) on the United Auto Workers’ (UAW) Jobs Bank. “The Jobs Bank requires the Detroit 3 to pay nearly full wages to hourly workers who have been laid off. Although the number of workers in the Jobs Bank has dwindled, the concept has become a powerful symbol of auto industry excess. General Motors is likely to propose its elimination, says a source familiar with the company’s thinking. Last week Bond did not spell out precisely which concessions he expects from the UAW. But during the congressional debates, many GOP lawmakers singled out the Jobs Bank as a wasteful Detroit 3 practice.”
The Engine Of Democracy: Invented by Hitler?
Ask the Best and Brightest: Who Will Walk Away With Saturn, Saab, Pontiac, Hummer?
Bailout Watch 248: Pulling Together
There’s a small rash of stories spreading through the media with a single common thread: everyone’s going to pull together to get GM through until the government picks up the tab. So, is it feel-good holiday rumormongering, or something more? Let’s take a look. The first story comes from Automotive News [sub], and it quotes GM purchasing boss Bo Anderson as saying suppliers aren’t demanding cash. And why would they? It’s not like things are tight right now. “Our suppliers are behind us,”Anderson tells AN, “We keep our terms of payments. They are contractual, something we negotiate with suppliers, and we think it is important to be a prompt payer. We are doing our best to hold the current terms.” Doth the gentelman protest too much? “It is very important to be very transparent and be open about the changes we see in the workplace with production schedules, product delay and any product changeovers,” says Anderson, while acknowledging that supplier CEOs face difficult conversations with their nervous directors, who worry about GM’s ability to pay as it suffers a liquidity squeeze and delays in getting financial aid from Congress. But anyone who has watched supplier after supplier go bankrupt over the past several years knows that suppliers have little choice in these matters. The UAW though?
Bailout Watch 246: When You Think "Viability" And "Accountability," Think Chrysler
Bailout Watch 244: Where's OUR $27b?
The Bush Administration’s decision to release $27b from the Troubled Assets Recovery Program to prop-up Citigroup has pissed-off Motown’s bailout brigade but good. “Financial industry rescue criticized as double standard” the Detroit Free Press‘ headline kvetches. “While the pending bailout of Citigroup is absolutely necessary because they’re too big to fail, it’s the height of hypocrisy of the outgoing administration and the treasury secretary to not make a more robust effort to do the same with Detroit,” said Anthony Sabino, a professor of business and law at St. John’s University in New York (chosen especially for his non-Detroit residency). “One cannot sit here in America and say Citigroup is more important than any one of the Big Three, let alone all of them together.” On the bright side, the funds directed Citi’s way have played straight into the hands of MSM class warriors like MSNBC’s Rachel Maddow, who see Congress’ reluctance to spread the national debt to Detroit as a classic triumph of evil champagne-swilling bankers over Bud-drinking blue collar builders. Paper shufflers vs. honest folk who make “stuff.” The meme is picking-up a head of [non-hybrid] steam– despite the fact that the banking system IS more important than Detroit’s stuff makers, and two wrongs don’t make a right, and where do you draw the line and who do you think you’re foolin’ (I got the presidential seal)? Never mind. Hubris will get you every time. Bank on it.
Bailout Watch 242: Obama Doesn't Want To Write A Blank Check
“Tax payers can’t be expected to pony up more money for an auto industry that is resistant to change.” Doesn’t want to be kicking the can further down the road either.
Bailout Watch 240: Rick And Alan Not Getting On The Bus
Bailout Watch 235: GM Outsourcing One Billion Bailout Bucks To Brazil
Bailout Watch 230: Harris Vs. Romney
Re “ Let Detroit Go Bankrupt” (Op-Ed, Nov. 19):
I noticed the Boston dateline on Mitt Romney’s article advocating bankruptcy for Detroit’s auto industry. From his New England home, Mr. Romney may not realize how much the industry has changed since 1969, when his father, George W. Romney, left Michigan to become housing and urban development secretary.
Nearly every recommendation Mitt Romney makes for United States automakers has already been undertaken by current management in Detroit. Automakers have been investing in the future on the order of $12 billion a year in research and development — second only to the semiconductor industry.
In addition, General Motors has cut $9 billion in structural costs since 2005 and last year reached a landmark agreement to transfer the delivery of health care to the United Auto Workers union.
Finally, it is inappropriate of Mr. Romney to invoke Walter Reuther’s name while advocating using bankruptcy to break union contracts. That reference may be overlooked in Boston but surely not in Detroit.
Steve Harris
Vice President
Global Communications
General Motors
Detroit, Nov. 20, 2008
Bailout Watch 229: GM CEO: "Our Bailout Plan's Ready"
Bailout Watch 228: Of All The Gin Joints In All The World…
In a press conference today, congressional leadership announced that it would not shut the door on a possible automaker bailout, giving the Detroit 3 until December 2 to come up with a plan to restructure their businesses. Which means the three stooges could be back in DC for an encore performance of their hit comedy routine “$25b, Please.” “The best way to proceed is to give them another opportunity to make their case, to the Congress and the American people,” says Senate Majority Leader Harry Reid (D-NV). “The key here is accountability and viability. That’s what we’re seeking. That’s not too much to ask.” Or is it? The compromise that was reached earlier today was nixed by Reid and Speaker of the House Nancy Pelosi (D-CA), not because it lacked accountability, but because it would likely have stripped efficiency retooling requirements from the already-appropriated $25b loan fund. So, instead Pelosi and Reid assigned an essay to Detroit’s CEOs entitled “how I would spend $25b to turn my company around.” The due date is December 2, and they must be typed and double-spaced. Don’t forget to show your work.
Bailout Watch 226: Senate Reaches Compromise on Bailout Bill
MSNBC is reporting that auto-state senators’ aides say they’ve reached a compromise to throw money at “speed emergency loans” to Chrysler, Ford and GM. And speed is the drug of choice here. After The Big 2.8’s CEO shot themselves in their collective feet in front of a Senate committee charged with rubber-stamping the $25b deal, Republicans and Democrats knocked some heads together. The peacock people say the as-yet-unnamed legislators plan to present their proposal at a mid-afternoon news conference today (Thursday). The plan: the president’s plan. The bi-polar, I mean partisan, I mean bi-partisan group will attempt to “divert” money from the already approved $25b Department of Energy Loans– to tide Detroit over until the incoming prez can do his part to subsidize the failing automakers with taxpayer funds. But folks, as this Bailout Watch originally postulated, this is NOT a done deal. Far, far, from it. And I’ll tell you why…
Bailout Watch 224: GM CEO Rick Wagoner Resigns. Almost. But Not Quite.
Bailout Watch 222: Motown's $25 Bailout Bill DOA?
Bailout Watch 221: Mitt Mauls Motown
Bailout Watch 220: GM Fastlane Blog Vs. The New York Times
GM Fastlane blog was launched with the usual blather about two-way communications between the suits and the “little people” (a.k.a customers), complete with assurances that executives really will (we swear to God) read your comments and respond. Aside from one remark by Rick Wagoner about one commentator’s girlfriend’s car (as I remember it), this has most decidedly not been the case. Now, GM PR Supremo Steve Harris has decided to use the blog to rant against the New York Times’ columnist Thomas “Don’t Call Me Kinky” Friedman. Yeah, that’s the spirit!
An Open Letter to Thomas L. Friedman
Dear Mr. Friedman:
On Meet the Press you said, “So, show me a plan…” on why GM should receive government aid to bridge the current global financial crisis. We’ve invited you repeatedly to visit General Motors and see firsthand all we are doing to transform our business and develop new, energy-saving technologies.
We’re disappointed you still haven’t taken us up on our offer. You would be surprised at what you’re missing:
Richard Wagoner's Gtterdmmerung
Watching the pressed suits in front of Dodd’s Committee made me sad last night. (Yes, we can watch CSPAN in China. On-line. Amazing. Probably a ploy to dissuade the Chinese populace from wanting democracy.) Sad I was, because I had expected an “are you or have you ever been tearing out the very heart of America’s industrial base?” I missed that a lot. Gettelfinger made me sad. How could he throw GM under the bus by giving the employer of his $73/hr union sisters and brothers last rank on the viability scale? Saddest made me Rick Wagoner. If he would have done the Iacocca, if he would have said, “Yes, I work for $1, I’m not worthy of more,” the bailout package would already be in the can. He blew it. Now there I sat, tears in my face, and German as I am, I thought: Rick Wagoner? As in Richard Wagoner? As in Richard Wagner with a typo? Last night was Richard Wagoner’s Götterdämmerung. You watched the funeral march of General Motors. Someone got a napkin? Danke.
Bailout Watch 219 – Live-Blogging Bailout Hearings. Not.
Bailout Watch 218: Gettelfinger Blackmails Congress
UAW President Ron Gettelfinger is joining Detroit’s two-day testimonial of shame in Washington DC today, and in case there was any suspense about what he would say, he leaked his notes to the Detroit News. The shameless audacity of his position shouldn’t come as a surprise, given his (and his organization’s) track record. Still, it might just take your breath away a little. Step one on the Gettelfinger formula for success, prove that the D3 are going under. Not hard. Step two, refuse to do anything about it. “We do not believe there is any justification for conditioning assistance to the Detroit-based auto companies on further deep cuts in wages and benefits for active and retired workers. We would also note that in the cases where the Treasury Department has acted to rescue financial institutions, it has only imposed restrictions on executive compensation. It has never mandated cuts in wages or benefits for rank-and-file workers and retirees. Thus, there is no basis for singling out the auto industry for different treatment,” says Gettelfinger in his prepared remarks. Step three? Blackmail, baby.
Bailout Watch 217: GM Rallies Its Customers for Bailout Billions
—–Original Message—–
From: GM Grassroots [mailto:grassroots@gm.com]
Sent: Tuesday, November 18, 2008 8:42 AM
To:
Subject: Your message to Congress
Dear —
Thank you for letting Congress know that you think the American auto industry is a part of the fabric of America.
Here is a copy of the actual message you sent to let them know how you feel about saving this critical American industry.
“I am a consumer who believes it is important to have an American car industry in this country. I am asking for your help.
Some critics call helping America’s automobile industry a bailout. I strongly believe this is an investment to rebuild our nation’s economic engine. If we do nothing, the future our country faces during this downturn is clear. We will see even more economic upheaval, communities will lose substantial businesses and revenue, and thousands of jobs will disappear. The negative impact will be worse than anything we’ve seen in our lifetime.
We are at a crossroads, where given the opportunity, our nation’s auto manufacturers can lead once again. In 2010, we will see labor and health care reforms kick in. We will also see new electric vehicles introduced that will help reduce our nation’s dependence on foreign oil. And if it weren’t for the recent credit crunch, these companies would be on the road to succeed.
If Congress does not act, it will be the shortest and fastest road from recession to depression. Our economy is suffering enough. Please help prevent further job losses and devastation to our communities. I am asking that you give our nation’s car companies the opportunity to complete this turnaround.
We cannot afford to lose this cornerstone of our economy. We should not depend on other nations for our manufacturing capabilities or new technologies. And we do not want to contribute to an even deeper collapse that will leave too many people facing further economic uncertainty.”
Bailout Watch 216: "Taxpayer Dollars Should Go To Companies That Can Show Viability"
Bailout Watch 206: Here's the Deal
Senator Harry Reid has revealed the devilish details of the bailout bill for Motown’s meltdown. First, as predicted here, the Dems are sticking to their guns. They’re insisting that the money come from the preexisting $700b Wall Street bailout, not the $25b Department of Energy Loans (which would incur the wrath of environmentalists everywhere). Under the Congressional bailout plan, Detroit could stick their snouts into $25b worth of Department of Treasury funds exactly one month after the authorization receives the President’s signature (should he decided to so affix). Automotive News [sub] crosses the i’s: “If enacted, the bill would direct the Treasury secretary to accept loan applications from companies three days after it becomes law and would require a decision on the applicant’s eligibility within 15 days. Disbursement of funds would have to occur within the following seven days.” Or what? They turn into a pumpkin? As for those strings attached, they’re no longer of the Jewish maternal nature (i.e. made of piano wire). “Companies getting loans would have to grant stock warrants or senior debt instruments to the government. Top industry executives would have to give up bonuses and golden parachutes; stockholders would receive no dividends.” Oversight board? Perhaps when Harry met Nancy they read TTAC. It’s nowhere to be seen. But there are other caveats…
Bailout Watch 205: GM Blackmails Dealers
Detroit’s slow-mo meltdown has been rife with tipping points for years now. As bad decisions piled upon bad luck, we’ve seen the signs become increasingly ominous. The light at the end of the tunnel has become so faint now that each new misstep comes hard on the heels of the previous one, each taking on ever more existential significance. Perhaps though, we have reached a new low in the news coming out of GM today, as Automotive News [sub] reports that GM will delay incentive payments of $302.4m to its dealers for two weeks. If this decision was made based on GM’s liquidity crisis, it means that GM can’t come up with $300m until December 11: A stuffed stocking of not good. On the other hand, if it’s another twisted ploy to generate political support for a bailout, it’s some inspired stuff. Based on the letter (after the jump) sent by GM VP of Marketing Mark LaNeve, it’s looking like a little of both. After all, blackmail has always been a crime of desperation.
Bailout Watch 204: Freep Loves Them Some Bailout Pt. 2
I think it’s about time to dub Freep the official home of pro-bailout agitprop. When you make the Detroit News look like it’s being run by H.L. Mencken’s Tabasco-marinated ulcer, it’s time to rethink your priorities. Or adopt the tagline “fair and balanced.” Anyway, the Freep’s unabashed Detroit boosterism is reaching a fever pitch, with everyone capable of wielding subject and predicate pitching in for the noble cause of disguising self interest as principle. From old standby (and former Cassandra) Mark Phelan, to financial columnist Susan Tompor, to a condescending missive by the Freep’s editorial board, the latest issue rotates faster than a Baghdad Bob interview in Spin magazine. Let’s pop a Dramamine and take a look, shall we?
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