Automotive News [sub] reports that GM will rush out its $4.9b restructuring plan for Opel in December, as it seeks to ease worries on the continent about the fate of the troubled division. “Our plan is very similar to Magna’s. I don’t think it’s worse,” GM’s Nick Reilly told reporters near Opel’s largest plant in Zaragoza, Spain. Reily has said that as many as 10,000 jobs and 20 to 25 percent of Opel’s production capacity could be cut in the restructuring. Though Reilly refused to indicate where cuts could take place, he did say that GM would not transfer production from Zaragoza to Eisenach in eastern Germany, as Magna had planned to do. He also previously implied that British government loans could prevent or mitigate a planned 800-job cut at Opel’s Vauxhall operations in Britain.
Tag: Ron Bloom
The Senior Counselor to the U.S. President for Manufacturing Policy; and Leader on the U.S. Presidential Task Force on the Auto Industry, Ron Bloom, was utterly clueless. He told Reuters that the Obama administration supposedly was just as flabbergasted by GM’s sudden reversal on the Opel deal as Angela Merkel and the rest of Germany was. That they supposedly were not consulted. And that this is just divvy, because it “underscores the independence of a new board put in place to safeguard the U.S. government’s investment in GM.” Isn’t Teflon wonderful?
“U.S. encouraged by Fiat plan for Chrysler,” runs Reuters‘ headline, attributed to car czarlet Ron Bloom. After commenting extensively about GM, in which Bloom controls a 60 percent taxpayer stake, he had only this to say about the eight percent government owned Chrysler and its recent plans:
We see management with a huge sense of urgency. We see a huge dedication and commitment, working extremely hard. It’s an ambitious plan.
But did Bloom see the 7 hours of Powerpoint presentations? “Encouraged” wasn’t exactly the description being flung around at the line for porta-potties. Hell, even Detroit’s cheerleader-in-chief and Automotive News [sub] publisher Keith Crain beats Bloom’s take hollow with his headline “This Year The Math Adds Up To 110%.”
Ron Bloom, the defacto head of the government’s auto restructuring task force (or what’s left of it), tells Reuters that the government wants to hurry up a GM IPO in order to get out of the “investment” as soon as possible. And as we’ve predicted, this means taxpayers will be getting the fuzzy end of the lollypop.
Private markets would like to see us exit this investment, and I think they will be more comfortable if we’re on a sustained path out the door than if they think we’re going to try to market time it to maximize return.
And really, why would taxpayers expect any kind of a return from $50b dumped into one of the most prolific wealth destruction machines in recent economic history? So when will this IPO/giveaway take place?