Editorial: General Motors Death Watch 244: Let There Be Light
As TTAC’s Bailout Watch series heads for the initially improbable quingenta mark, it looks like the GM C11 naysayers are just about all nayed out. In his column, Detroit News Auto Editor Manny Lopez finally admits that a Chrysler/GM bankruptcy is . . . an option. Meanwhile, the self-styled AutoExtremist has thrown in the towel. In fact, Peter DeLorenzo now reckons GM is damaged beyond repair. A PR/marketing guy to the end, DeLorenzo has a solution: change GM’s name. “One hundred years of accomplishment and historic value to the American industrial fabric has been decimated in a matter of months. Once one of America’s corporate icons, GM has now been reduced to being a punchline for a running national joke, and this new car company will have to be unburdened of the GM name, pronto.” A matter of months? Clearly, DeLorenzo hasn’t been paying attention for the last decade or three.
GM isn’t the only one whose name is mud these days. Our neighbors to the north weren’t exactly thrilled when Chrysler told the Canadian Auto Workers to concede, the government to cough-up the bailout bucks or we’ll take our toys and go home. And now Ex-CEO Rick Wagoner stands accused of screwing GM’s Canadian subsidiary to secure taxpayer funding for his employer.
Bloomberg reports that “General Motors said it moved almost C$600 million ($495 million) from a Canadian unit to the U.S. [in March] as part of a deal with banks to strengthen U.S. operations and win government bailout money.”
Anyone remember when freshly-minted GM CEO Fritz Henderson announced the startling news that they didn’t have to draw down “extra” billions by the end of the month to keep the lights on? Apologists put it down to careful husbandry. Well, now we know the truth about GM’s sudden (if temporary) push away from the bailout buffet.
Of course, there’s the small matter of the bondholders left behind by GM’s run on the bank. And boy are THEY pissed.
Aurelius, Appaloosa and five other funds, who hold notes valued at 377 million pounds ($562 million), sued March 2 to have the money returned to the GM unit in Nova Scotia, which in 2003 issued the two series of notes.
The funds claim GM, the parent company, is either insolvent or on the brink of insolvency and knows it won’t be able to honor its obligation to the noteholders.
The parent company “has been or will be unjustly enriched at the expense” of Nova Scotia Finance and its creditors, the funds said.
See you in court? Hello? Chapter 11? Take a number and get in line, bud.
And join Pontiac and GMC dealers. Bloomberg also reports that “people familiar with the [federal] discussions” about GM’s train wreck say that the Pontiac and GMC may/will/might/could get the axe. This as GM’s “Savings Push Deepens.” It has to be asked: Fritz, do you like it like this?
GM’s spinmeisters responded to Bloomberg‘s Wild Ass Rumor with the kind of openness you’d expect from federal employees. “We are continuing to assess our global operations, brand portfolio and nameplates, and will take further actions to more aggressively restructure our business,” Renee Rashid-Merem, a GM spokeswoman, said yesterday. “It’s premature to comment on what those actions could entail.”
GM is talking muy macho for a company about to enter the Mother of All C11s. Ford, on the other hand, is talking softly and offering its dealers a big shtick.
The Detroit News curmudgeon Daniel Howes has finally broken radio silence to reveal that The Blue Oval Boyz have sent their dealers $1K in conquest cash with which to lure fleeing GM and Chrysler customers.
“Domestic intenders for Chrysler and GM have been defecting to Ford and Lincoln Mercury products in great numbers since the beginning of the year,” Amanda DeMouthe, marketing manager for Ford’s Boston, New York, Philadelphia and Washington regions, wrote dealers in an internal memo.
“And as media continues to speculate on the possibility of bankruptcy, those defections will surely continue. Please be sure your teams are aware of this new incentive. It is stackable with Customer Cash, Bonus Cash and 0% APR!”
You want domestic metal cheap? You know where to go. As Mr. Howes reminds us, it remains to be seen if FoMoCo can avoid the same fate awaiting General Motors at the hands of the feds. Meanwhile, everyone even remotely connected with Chrysler and GM is getting hammered, or is about to get hammered.
“Customers ask that question almost every day and they expect you to give the cars away because they say you’re in bankruptcy or soon will be,” New York Chrysler dealer Jonathan Grant tells our Mr. Howes. “This thing’s like a cloud that is hanging over us.”
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