Bailout Watch 340: GM CEO Contemplates C11

The Wall Street Journal carries the surprising news that General Motors management might be starting to edge closer to reality: “Speaking at the North American International Auto Show in Detroit, Rick Wagoner, GM’s chairman and chief executive, said the company wants to avoid a Chapter 11 filing, but also said its viability is ‘not 100%’ certain at this point.” Rick backing away from the position that GM hasn’t even thought about C11 is news. “The Treasury Department has said GM must have a plan by March to become ‘viable’ and have ‘positive net value.'” Nobody actually expects GM to have worked out details with bondholders or the UAW before the March deadline. The March deadline was chosen by the current administration as a way to act tough while kicking the can over to the new team, and everyone involved knows it. The UAW says it isn’t clear what is being asked of it and hasn’t started negotiations. Meanwhile, regarding the bondholder negotiations; “GM Chief Operating Officer Frederick ‘Fritz; Henderson suggested Monday that it could be some time before substantive discussions can be held.” So, nothing is really happening with the UAW or the bondholders yet. How about pulling the plug on dead brands?

“At the car show, GM’s top European executive, Carl Peter Forster, said the company must adequately fund Saab before it can sell the money-losing business. The stabilization could take eight weeks, he said.” Say what, they are going to pump cash into Saab to stabilize it and will do so over the next eight weeks, at which time it will be a saleable company? If Saab could be stabilized in eight weeks, why wasn’t it done months ago? Saab is dead, but nobody wants to tell the family the news.

Unfortunately there are still no signs of GM engaging in the kind of Truth and Reconciliation process our own Ken Elias called for so eloquently. PR gambits continue to rule the day at GM.