Bailout Watch 138: This Man Holds the Key to Detroit's Future
The Detroit Free Press breaks its self-imposed embargo on genuine reporting on Motown’s End of Days with a startling piece of investigative journalism. The Freep reports that the Bush administration (remember them?) has appointed U.S. Commerce Secretary Carlos Gutierrez gatekeeper to the federal teat. For some reason, scribes Hyde and Higgins (how Dickensian is that?) begin their piece with not one but two sneering references to Gutierrez’ background as the former head of Battle Creek-based Kellogg Co. And no wonder. Other than a couple of “we like this guy” quotes from an “industry leader” and an analyst, they got nothin’. So… let’s quote Bloomberg then. “GM told its U.S. dealers Friday the company was only halfway to its October goal for sales to consumers with just one day left in the month, Bloomberg reported. The so-called retail sales totaled 89,961 vehicles through Thursday, compared with a target of 175,989, the company told dealers.” Hey guys, how about a little context there? No. OK. So… we’ll quote Bloomberg then. “The automaker hasn’t increased annual U.S. sales since 1999.”
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Well these characters created this mess and it is their responsibility. Sure they will whine and blame something else, but GM is 'done'. The government bailout may keep them on life support a little longer, but without major contract changes and management changes nothing much will happen to save their skins.
That muesli manager looks like a twin of Geraldo Rivera - separated at birth.
I still think that most everyone here is wrong when it comes to the future of GM (and Ford). I would put the probability at about 70% that GM will be nationalized at some point during 2009. As for Ford, I would still put the odds at greater than half that they will undergo the same fate. There is no way that an Obama administration would allow all the jobs the Big 2 sustain to go under. The estimated number of jobs that are created by these two companies, both indirectly and directly, are approximately in the mid-seven figures. That is if you truly believe that every employee directly employed by GM/Ford results in anywhere between seven to nine jobs created outside those hallowed halls. Nationalizing the automakers (for all intensive purposes) would enable Congress to draft legislation, and provide restructuring, in a way that would far less disruptive than a Chapter 11 proceeding. There is no way either brand would survive in the public eye if a Chapter 11 filing were to happen. None. As for Chrysler, their current state is mostly the fault of Daimler's boneheaded managers who raided their coffers and gave them scant R&D support. Most of us here could write a book on all the ways Daimler screwed Chrysler. But in the end Chrysler may be the one automaker that could be sold off and liquidated without seriously harming the American economy.