This has no basis in reality. D3 have been building poor vehicles for decades, and it took that long for them to finally bit the dust (and they’re still twitching). So you’re only off by orders of magnitude.
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The intervention was led by George W. Bush. What saved us was TARP, which was passed during the final months of his term. I can’t wait until he receives credit for it…

While TARP and numerous other bank capitalization vehicles did save us, therein lies one of the larger ironies (and by ironies I mean deceptions) of the “conservative” ideology (and by ideology I mean dollar-store ideas meant to make a buck or billion).

To avoid the impression of “nationalization”, public money was given/loaned/etc to these banks with no ownership or control, and extremely little transparency to the public. While throwing enough $ at it will somewhat solve the problem, it was done in pretty much the worse way possible as far as spending public money is concerned. Remember these are imbeciles who argue over a few mil for a planetarium, and turn around and hand out a great many billions and respond with righteous indignation when questioned where exactly it’s going.

In this automaker case, we’re actually seeing far more transparency and accountability, and it’s very revealing how that part of the political spectrum is treating it compared to banking.

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And to get to a depression, the unemployment rate would have to skyrocket

It’s generally measured by gdp (~10% p-p, which we may yet reach), but whatever since you’re just making stuff up.

Funny too you’re using unemployment since these d3 bailouts are mostly about that, and here you are bitching about it even tho it seems quite a decent deal compared to the TARP et al you enjoy.

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They simply are not as nimble or responsive as a successful company that must compete for consumer dollars.

It’s a good thing they’re looking for private partners, right?

Often times, I have no idea what point you’re trying to make. It’s like you’re looking for something to whine about and just throw stuff against the wall to see what sticks.

When developing new vehicles, even a few months are critical. Especially when competitors aren’t standing still, waiting for GM to right the ship. Once customers leave, it’s extraordinarily difficult to get them back – especially in a mature market. GM does not have the luxury of time, if it wants to get back on its feet and compete successfully.

If it wants to become the American Patient, that is an entirely different matter.

agenthex: The only reason why it’s not a “depression” yet is due to massive gov intervention, and we may get there yet once first quarter numbers are in.

The intervention was led by George W. Bush. What saved us was TARP, which was passed during the final months of his term. I can’t wait until he receives credit for it…

And to get to a depression, the unemployment rate would have to skyrocket…and, at this point, we haven’t even reached the high point for unemployment set during the 1980-82 recession, let alone the Great Depression (unemployment hit 25 percent in 1933). And note that the unemployment rate is typically a lagging indicator – when it peaks, the worst is acutally over.

agenthex: Once you reach the professional ranks, like AG office or scientific endeavors, they seem to work as their pay scale demands.

Government entities still have differing expectations regarding how to manage costs and the speed needed to complete work, as compared to well-run companies in the private sector.

Having worked in both, I can assure you that there is a difference – even if the government entity is well run.

They simply are not as nimble or responsive as a successful company that must compete for consumer dollars.

agenthex: In any case, it still hasn’t quite reached you that the running of this business is not the DMV or whatever you’re thinking of.

I have no trouble understanding what is going on here. That is why I’m concerned. It helps to have at least a rudimentary knowledge of how the auto industry works.

agenthex: It’s quite high visibility and likely accountability.

That’s a prediction on your part, not a statement of fact.

This doesn’t address the point, your timeline is still wrong. A couple months here is not going to be critical in the grand scheme of product dev. Making sure the necessary changes are done well in the long run is far more important.

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And please note that we aren’t anywhere near a depression at this point.

The only reason why it’s not a “depression” yet is due to massive gov intervention, and we may get there yet once first quarter numbers are in.

What this means is that the post hoc verdict is irrelevant in the current timeframe. The gov acted as if it were urgent, and it’s a good thing they’re doing something.

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This is not to say that all government employees are inept – they certainly are not – but the approach taken by most government employees will not work in a competitive, fast-moving industry.

Many are not expected to; they may hired to serve as lowly bureaucrats and they seem to bloaviate with the best of them.

Once you reach the professional ranks, like AG office or scientific endeavors, they seem to work as their pay scale demands.

In any case, it still hasn’t quite reached you that the running of this business is not the DMV or whatever you’re thinking of. It’s quite high visibility and likely accountability.

Ironically, they don’t want to run these companies because they are not the “socialists” who many of the politically inclined would like to believe them to be.

They are trying to broker a no muss-no fuss breakup and handoff, much as they would with a failed bank. The government problem is that unlike banking, it doesn’t have the in-house expertise to do this for long. Since getting the government debt repaid by selling the company is the inevitable exit strategy, it would be preferable to do it sooner than later.

If this drags on, the task force will have no choice but to get into the trenches and start running aspects of this, such as hiring the top management. It would frankly be kind of entertaining if they were to do that, because if they made the right choices, they’d probably be recruiting people from Ford Europe, BMW, Holden and a host of other non-American citizens to fix this thing. The talent pool at home is so tainted that we really need to import the help.

That leaves a very short list, that might include, Renault, Fiat, Magna, an Indian firm or two, some Chinese and Russians who nobody wants, and maybe some private equity guys such as Jac Nasser, as has been rumored.

The Feds bringing Jac Nasser in to run GM would be surreal.

Because Honda, Toyota, Nissan, Hyundai, BMW, Mercedes and even Ford aren’t twiddling their thumbs, delaying new product introductions until GM gets back on its feet.

If the goal is to make GM a competitive player again – and have made it worthwhile to shovel all of that taxpayer money into GM – the restructured company needs to get up and running as quickly as possible. If it falls too far behind, it may never catch up to the leaders. Being a laggard in too many segments is part of what landed GM in its present trouble.

Unless, of course, the plan is to keep injecting more government money into GM at regular intervals.

And please note that we aren’t anywhere near a depression at this point.

agenthex: First of all, this isn’t a federal dept, and they’ve not appointing executive officers.

I never meant to suggest that GM was. I was responding to your post that said this: I don’t see why this is so controversial. Employees of plenty of federal institutions serve with relative competence.

Having worked in both the private and governmental sector, I can assure you that there are different expectations regarding performance and approaches to cost control.

This is not to say that all government employees are inept – they certainly are not – but the approach taken by most government employees will not work in a competitive, fast-moving industry.

agenthex: But even if we’re to assume so, it’s putting cart before horse because the reason they’re not “competitive” is because they have no competition.

Until they are tested in a competitive environment, the assumption is that, without having to worry about competition, they work under a different set of expectations and demands than a company that lives or dies in the competion for consumer dollars.

I don’t understand the elevated sense of urgency on this. The most important thing in meantime is to not let the company collapse in the middle of a depression, and achieve that goal at minimal cost.

Products will take orders of many months if not years to arrive anyway. If there’s a compromise to be made, it’s better to pick people who are good rather than quickly.

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Federal agencies and departments are not expected to turn a profit, and aren’t worried about competitors providing the same good or service.

First of all, this isn’t a federal dept, and they’ve not appointing executive officers.

But even if we’re to assume so, it’s putting cart before horse because the reason they’re not “competitive” is because they have no competition. Despite popular belief, there’s no magical touch of government that lays to waste competent people (and in general, the gov does compete in the broader labor market).

OTOH, PCH’s idea might work, but you will definitely need a team that has experience working with an interventionist government.

It doesn’t, because the government needs a business entity to come in to take over.

That leaves a very short list, that might include, Renault, Fiat, Magna, an Indian firm or two, some Chinese and Russians who nobody wants, and maybe some private equity guys such as Jac Nasser, as has been rumored.

That’s about it. You can count them on your hands, and probably have digits left over. That doesn’t leave much room for a Plan B.

False assumption. Mulally’s apparent success proves a point – not having auto experience should not rule out a qualified candidate from the top post.

When Kellogg is in trouble, there will be a Presidential Task Force for cereal.

When Ralph Lauren is in trouble, there will be a Presidential Task Force for fashion.

Good thing, if you just lost your job, just apply for a job at the federal government and be part of the Presidential Task Force for your previous industry (and potentially scrutinize the boss who fired you).

If you weed through all the excuses and posturing, that is what you are really left with.

Now, the question about management is really interesting because motivations aside, everyone wants a success in the end. It seems to me that GM is a lot like a government, and taking over a government with new people will usually fail unless you have enough help from old people who know how things actually get done in that bureaucracy. So, there is a limit to how many heads can roll at the top. We have done a great job of replacing leadership training with MBA training for the last couple decades, so finding the right top guys who can walk in and take over will not be easy. Maybe you can get General Petreus?

Its like being morbidly obese One doesn’t get fat overnight.And for sure your not going to lose it all overnight.The only way will see results is making massive change in your eating and physical activity.

Thats where we find ourselves with GM and Chrysler today.But like the fat guy if we don’t start moving and changing real fast,the patient is gonn’a croak.

I really enjoyed your discussion in these comments. It’s a refreshing change from the usual government-bashing/union-bashing that goes on.

There are no perfect solutions to the GM/Chrysler messes, only bad and less-bad ones.

The problem here is that the government is looking at a potential derailment of the economic recovery if we permit that to happen now. Plus, it locks in the burden of the pensions and paying unemployment to everyone who gets pink slipped.

Perhaps worst of all, it would result in a substantial writedown of what the government has already loaned, and only within weeks of providing the money.

If Fiat is truly interested, there isn’t much reason for them not to take it, just so long as the downside risk to the government is limited. If Fiat makes an effort in earnest, then it can at the very least push off the failure to a later date when it doesn’t matter so much.

Chrysler? I’ve said it before; Ch7.

Federal agencies and departments are not expected to turn a profit, and aren’t worried about competitors providing the same good or service. That’s a huge difference compared to a manufacturer of a consumer good that must compete with the products of other corporations on quality, price and style. In that environment, “relative competence” on the part of company employees – let alone leadership – isn’t enough.

The Environmental Protection Agency, for example, doesn’t have to worry about Toyota and Honda providing a nearly identical service at the same or lower cost with better quality…

How does having a new incoming company run the joint suggest the lack of a “hard decision”?

The government is effectively saying that they don’t want to operate them, they’d rather have the private sector take over. What would you do if this was your problem to solve and you had the same constraints?

But that appears to be the game-plan.

Busy-work for all concerned without a single hard decision being made.

Hard decisions won’t be made because stretching this out appears to be the automotive anti-unemployment strategy that anyone in the administration (including PTFOA) has come up with.

I disagree with that, IF the new player (Nissan, Fiat, etc.) enters quickly.

In any case, it’s sort of a done deal, in that the incoming company is going to choose the management. It’s simply not our choice to make; the incoming group would undo it all, anyway, if they didn’t like it. There’s no point in us making changes that can’t stick. You don’t need a new marketing guy if he’s going to be dumped in a matter of weeks, anyway.

In GM’s case, Henderson is just there because Wagoner was a big PITA who was uniquely obsessed with keeping his job and would therefore be unsuitable for even a transition. (Wagoner reminds me of the guy in “Office Space” who absolutely couldn’t accept the idea of being gone.) Henderson will probably not survive, although if he does, it won’t be the government’s doing.

The sticky point arises if Fiat, Nissan, etc. don’t come through. Then the government will have no choice but to pick the management, because they can’t just let the companies sit in limbo forever.

I understand your point (and fully expect to be crushed by the weight and frequency of your logic), but I’m saying that this management team is not the one to decide which “assets” (a.k.a. liabilities) to sell.

I think that we agree that

1. Time is of the essence, that burn rate’s gotta go down
2. GM’s current management really sucks
3. Someone else may soon call the tune

Perhaps you’ll also agree (stranger things have happened) that

1. Brand and product decisions will make or break the “new” GM, just as they did the old one
2. The management decisions taken now (as in right now) on that front will affect the incoming leader’s abilities to sort that car-related shit out.

And that’s where I say either get a new leader now or stay the hand of the current team. In terms of “investment,” we (the people) need to think long term. Unlike GM past and present.

I’ve worked on stuff that was smaller that has taken two years to close. There are a lot of moving parts, and not everybody is motivated to hurry when they’re putting fine points to the details.

If you want a comparison, just look at Cerberus. They started the talks with Fiat a year ago. A year ago. They’re supposedly private and efficient and got their capitalist mojo, and they still hadn’t closed. It obviously isn’t that easy.

Part of the problem is that during times like these, Fiat, Renault, and a few select others are the only girls at a prom for desperate, anxious guys who don’t have dates. Here’s a bet — if Fiat and Nissan fail to close, there is no Plan B. That is not exactly an enviable position in which to be.

Deals in the private sector can take years to close. These guys may be close to putting two deals to bed, and they’ve been at it for just four months.

My apologies for being the contrarian, but not in the deals that I’ve seen our company involved with.

Million dollar deals and a few billion dollar ones too, across continents and tens of thousands of employees, operating offices, assets, legal entities etc… on and on.

Just yesterday, Fiat said they wanted to merge Opel with Fiat Cars and spin it back out for investors during May for completion before the end of the European summer.

4 months is bags of time if the aim was to restructure/split/spin-off various companies, but even you’ve said that’s not the aim. They’re just keeping GM aloft for as long as possible. Hard decisions aren’t part of that equation.

It’s easy to assume, because their actions suggest how motivated they are. They obviously want to sell out.

Whether or not they’ll succeed is another matter, because of the lack of prospects. The effort is sound, but the odds would be stacked against anyone at this point. (Look at how well the rather non-public Cerberus did in its efforts to cobble together partners. Private does not always equate to better.)

Meanwhile, the feds are pushing GM’s current management team to make all kinds of radical moves: killing this, that and the other thing.

They have to. They need to contain the burn rate.

Cash is always scarce for turnarounds, and cutting the burn needs to be a priority. The bankruptcy does allow them to chuck some of these “assets,” which lowers the cash payments that will be required to satisfy the remaining creditors. If they tried to keep all of the assets, then the new company would have to put up more money. I wouldn’t suggest paying money for bad brands and useless R&D, just so that the new company can just punt on them.

You’re assuming that the feds will surrender control of GM to an incoming party/outside carmaker, sooner rather than later. In that case, correct: leaving GM alone is both SOP and “the right thing to do.”

But despite yesterday’s Nissan – Renault WAR, we’ve heard nothing about any GM “partners.” And the feds AREN’T leaving GM alone. They’re pushing GM’s current management team into making all kinds of radical moves.

The April/May race to reconfigure GM (e.g. killing brands, flogging foreign ops, closing factories) is giving GM consumers, suppliers and workers the heebie-jeebies. If there isn’t a suitor waiting in the wings, if the feds aren’t going to liquidate, why let these Bozos keep screwing things up?