Comments on: GM Fire Sale Continues: RenCen for Sale

By: Domestic Hearse

Domestic Hearse — Wed, 08 Oct 2008 21:48:09 +0000

Irony of ironies…TOYOTA buys the RenCen and changes the name to the YenCen.

“Ah, Mistah Wagnahsan…we have redecorated your office and moved it to the, ah, basement with the janitah. You will report to him.”

Seriously, if you’re a fireman or cop in Detroit, do you want anyone to gamble your future with GM-owned Detroit real estate?

And $500m? Heck, that’s just 15 days of cash burn any more.

By: joeaverage

joeaverage — Tue, 07 Oct 2008 21:22:10 +0000

So are the top level folks taking pay cuts yet or will the managementlay off the assembly line folks and assemble the cars themselves?

By: John Horner

John Horner — Tue, 07 Oct 2008 17:21:22 +0000

“Didn’t they just BUY the Ren Cen a couple of months ago?”

They sure did. I wrote a critical blog post for TTAC on the purchase back in May which Robert has linked above.

Over the past year I’ve taken some heat for saying that GM management is filled with idiots, but I stand by my description! So far they have continued to live down to the label.

Hopefully the union pension funds will not be stupid enough to lend GM money to “refinance”. Didn’t anyone tell GM that cash out refinancings are so yesterday?

By: KrohmDohm

KrohmDohm — Tue, 07 Oct 2008 16:17:54 +0000

When exactly did GM get in the business of house flipping?

By: nudave

nudave — Tue, 07 Oct 2008 15:57:12 +0000

Rix

Key word is “when”, not “if”.

By: 50merc

50merc — Tue, 07 Oct 2008 15:34:08 +0000

The trustees of those pension funds have a fiduciary duty to invest prudently. What’s prudent about betting on Detroit real estate, especially a project that has to have a mega-tenant like GM for financial viability. If GM pulled out, RenCen would be the biggest realty albatross ever. The trustees should be thinking about what’s best for the pension funds, not what’s best for GM.

By: Rix

Rix — Tue, 07 Oct 2008 14:54:44 +0000

If GM goes under, Detroit will be half the size and RenCen will be worthless…

In a world without GM, no lawyers to do GM contracts, no tooling orders for the suppliers, no dentists for the GM employee’s kids, no guests for the fancy hotel in the RenCen….

….no waiters to serve Rick Wagoner’s tea and scones….

Detroit will revert back to the wilderness.

By: Sajeev Mehta

Sajeev Mehta — Tue, 07 Oct 2008 14:29:18 +0000

lewissalem : having lived in Metro Detroit pre-RenCen purchase and the associated urban renewal that followed, I agree. That was a seriously scary part of town for a long time.

A post C11 General Motors should be small enough to move the whole party back to the old GM building. That’s where they belong.

By: Usta Bee

Usta Bee — Tue, 07 Oct 2008 14:23:04 +0000

Who would want to BUY a place like that in a city like Detroit if GM tries to unload it ?. Just another example of GM management’s ineptitude.

By: lewissalem

lewissalem — Tue, 07 Oct 2008 14:11:24 +0000

Well, back in ‘96 the purchase and renovation of the Rencen was viewed as a positive thing because the building was going to sit empty, as another symbol of Detroit blight. The $500 Million renovation really helped (didn’t help me navigate the haphazard floor plan). I’m not sorry for the company, however, I am sorry for the city.

By: psarhjinian

psarhjinian — Tue, 07 Oct 2008 13:34:33 +0000

Pch101’s comments in the original buying thread are disturbingly (or amusingly, depending on your view) prophetic.

By: yankinwaoz

yankinwaoz — Tue, 07 Oct 2008 13:27:16 +0000

That’s right. A few months a go they just bought (or paid off) the building.

By: jaje

jaje — Tue, 07 Oct 2008 13:16:44 +0000

Well GM’s first priority are their executive salaries and bonuses for doing a “heckuva job”. So if they need to sell their HQ which they bought merely a year ago in order so that Ricky Bobby have enough pay b/c they must be struggling like all other Americans only getting $14M a year at least for Ricky. I don’t know how I’d survive on so little either.

By: Cicero

Cicero — Tue, 07 Oct 2008 13:14:30 +0000

Coming soon. Zero percent financing, $2,000 factory cash and 500 square feet of Detroit office space on all new Chavy Tahoes and Silverados.

By: Samir

Samir — Tue, 07 Oct 2008 13:02:37 +0000

Anything to keep the lights on I suppose!

The problem is this doesnt do anything for GM’s core problems. It’s just morphine to dull the pain, when what is needed is a full-on surgery.

GM doesnt have a game-changing product like the old Ford Explorer or the Ford Taurus around. The Volt is going to be milquetoast Cruze Hybrid, not a muscularly styled futuro-mobile. It will offer no compelling reason for people to stop buying the cheaper and more proven Prius or Civic Hybrid. Then GM will come up with another vapourous product to keep the faithful’s hope alive. The recent pattern of this is obvious:
Solstice–>GMT900–>Aura–>Malibu–>Volt and so on.

In truth it’s probably been going on longer than that, I can still remember how the Vega was supposed to beat the imports back to the sea.

And if you measured GM time in billions, this $15b is about 6 months of cash burn to GM. Not sure that’s enough time to come up with anything either.

Oh yeah, with consumers sitting on cash right now, GM’s timelines are even shorter. With GMAC not cooperating, the (sunk cost) Aveos will sit on the lots and not generate any cash while, let alone profit. Meanwhile, people will buy Hyundai Accents.

By: Ingvar

Ingvar — Tue, 07 Oct 2008 12:43:36 +0000

Nice… Keeping track of GM:s moves is much more fun than watching any docusoap.

By: Robert Farago

Robert Farago — Tue, 07 Oct 2008 12:37:39 +0000

Ingvar:

It’s nice that someone bothers to keep track of al this shit (other than us).

I’ve inserted the link for the purchase into the text.

By: Ingvar

Ingvar — Tue, 07 Oct 2008 12:28:21 +0000

Didn’t they just BUY the Ren Cen a couple of months ago? Like long-term? Because it was such a good investment? I see the future, I see a lawsuit landing on Wagoners desk, based on criminal negligence.

And are they finished ransacking their own pension funds now? Line up and bend over, is all I have to say, because somebody is going to get screwed…

By: seabrjim

seabrjim — Tue, 07 Oct 2008 12:23:25 +0000

Its officially time for the GM funeralwatch series.