Bailout Watch 241: GM's Plan B
Automotive News [sub] is reporting that GM managers are worried enough about their chances for a bailout to write up a “Plan B” in case the funds don’t come through. Of course this plan has nothing to do with restructuring, returning to profitability, or facing reality, it’s simply a plan to “keep the company running until President-elect Barack Obama takes office in January.” At which point… um… nope, it doesn’t say anything. Nationalization? Chapter 11? The Rapture? Who freaking knows. Anyway, the “Plan B” is pretty much a bunch more of the same, as it calls for GM to delay payments to suppliers, slash white-collar jobs and salaries and gut its marketing campaigns. So, y’know, the usual, only a little worse. AN even suggests that “the cuts could even seep into r&d — the vital core activity crucial to GM’s long-term success.” Which is how necrosis works. One minute you’re cutting off toes and telling yourself things will be fine. Before you know it, you’re out of limbs to sever and the stuff is up to your neck. If (more) R&D goes on hold, GM will have no future to fight for. And if suppliers start demanding payment on delivery? Game over. Sources are saying GM will make “a massive communication to the world” of its plans after Thanksgiving.
What happens if their stiffed suppliers pull them into involuntary bankruptcy?
BTW, what was Plan A?
Quote: ttiley-" Such is the sorry state you folks find yourselves in-you employ 8-10X as many people as any Wall Street enterprise GM employees 266K workers, or thereabouts. http://www.iht.com/articles/2008/10/17/business/auto.php S**tibank, I mean Citibank, “employs” 352K, though they “plan” to cut this to 300K."-ttiley Ooop, I had a Senior Moment there...I was thinking about the Domestic Auto Industry employment figures inclusive of suppliers, raw materials as a whole and this article is about GM only. ttiley is right and I was wrong. Sh#tibank does employ more people currently. Hey Fed, if Citibank was guaranteed $326Billion in loans and debt relief and they have 352,000 employees that works out to about $93,000 per employee. So if you follow you oh-so-fair level-headed way of doling out your 'help' to preserve the economy, then if you multiply that same $93,000 per employee by the 266,000 GM employees you arrive at a number somewhere around $247Billion for GM alone...That's only fair right? Not.
Robert Schwartz: I told you already: 1. Cut costs and release the Volt. 2. ??? 3. PROFIT! That has ALWAYS been their game plan. Thus why they are begging the government for money.