GM BOD: Bankruptcy IS An Option
While steering the artist formerly known as the world’s largest automaker into career suicide, GM CEO Rick Wagoner has steadfastly maintained that “bankruptcy is not an option.” As many members of TTAC’s Best and Brightest have pointed out, that kind of stonewalling A) Is insane and B) reveals guarantees a class action lawsuit against GM’s Board of Bystanders. The Wall Street Journal reports that the Board has released a statement which illustrates their feeble-mindedness, managerial paralysis, blantant cowardice and compelling desire not to end up folding shirts at a federal prison farm. “GM said the board had discussed bankruptcy but didn’t view it as a ‘viable solution to the company’s liquidity problems.’ The board “is committed to considering all options in light of circumstances as they may develop.” In other words, NO BANKRUPTCY. Unless there is. Meanwhile, the Journal hints at disagreements between Board members and Wagoner, the company’s CEO AND Chairman.
In reality, GM’s Board of Bystanders have singularly failed to exercise proper oversight over GM’s management. They should have pulled the plug on Wagoner back in February 2005, after the CEO pissed-away another $2b on a FIAT deal that should never have happened in the first place. Or soon thereafter, when it became abundently clear that Wagoner was selling assets and draining foreign funds to pretty-up GM NA’s redink soaked ledger.
The chief culprit in this do-nothing disaster: lead director George Fisher. How the retired chairman of Eastman Kodak Co., the man in charge of another industrial giant that took a heroic dirt nap, came to control GM is another story. Suffice it to say, several times in recent years, George has voiced his support for Mr. Wagoner, even as the automaker descended into disaster and, wait for it, insolvency.
Comments
Join the conversation
Wolven "As a business owner, I have the RIGHT to decide who I will hire, who I will fire and DICTATE the terms of employment at MY COMPANY" And if the workers vote in a union you are stuck with them. Like it of not GM's workers have voted in a union and thats that.
The GMC truck division should not continue as a part of GM. GM and the US government have one chance to get the reinvention of the new GM right and avoid continued government and taxpayer support. Domestic and import full-size truck and SUV sales are declining with fuel economy concerns, so manufacturing two of the same brand is not a profitable long-term business model. Chevrolet and GMC trucks and SUVs are essentially the same vehicles. Chevrolet models cost less, have equal or better quality and fuel economy, and outsell GMC models more than three to one. Toyota and other imports don't manufacture two of the same full-size vehicles under different brand names; it does not make sense, economically, for GM to continue producing both GMC and Chevrolet. Advocates who hope to keep GMC as the auto industry changes to more fuel-efficient models want to continue a business strategy that will ultimately be as unprofitable as the now defunct brands of Hummer, Pontiac, Oldsmobile, Saturn, and Saab. Follow the import business model, eliminate GMC now, and save the costs associated with the extra GMC manufacturing processes and distribution channels, which will not be part of a long-term solution. The new GM will be more profitable going forward without GMC if Chevrolet produces and sells all of GM's full-size trucks and SUVs. GM won't need government and taxpayer support again if GMC is eliminated now.