Quote of the Day: The Audacity of Optimism Edition
Published: September 17th, 2009
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I’m optimistic we can pay off the loans faster than people think. Payment is due in 2015. We want to do it much faster than that.
GM CEO Fritz Henderson breaks our incredulity meter at the Frankfurt Auto Show. And how does Fritz propose pulling this coup off? “Creating value for our shares is the best way the taxpayer will be repaid,” he explains. In other words, Henderson expects GM’s Summer 2010 IPO to reflect the $68B market cap valuation it needs to pay back taxpayer loans. Meanwhile, GM’s Chairman reportedly puts the odds of success on any timeline at 60-40. Paging Optimist Prime . . .
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ttacgreg: Best job I ever had. Dude! Driving Chryslers? You need to get out more! The job might be good but the experience had to be hell.
@FreedMike: "But the rational thing to focus on now is how to get our money back, and trashing every single thing GM does – or outright wishing failure on them – isn’t going to help them succeed." I wrote off ever collecting any Social Security many years ago. I have already written off ever recouping any of "my investment" in either GM or ChryCo. There is nothing rational about focusing on getting our money back - it's looooong gone, buddy. Your tax dollars at work.....
GM doesn't actually "owe" the government that much. Through the sweetheart bankruptcy, our government converted much of that money into an "investment", equity in the company. The initial public offering will establish the value of the government's ownership stake, it won't bring in $68 billion in cash. That dollar figure is the estimated value of all the stock the company will be authorized to issue. The government probably won't get a peeny of the IPO proceeds, that will be retained by GM (in lieu of further cash subsidies). GM will probably continue to finance itself with that offering process until it has issued all its authorized stock, and I hope by then the government has sold off its stake.
I was at a presentation about the stupid Volt yesterday, two students were talking about all kinds of logostics issues, and took cover under "confidentiality" so not to say anything of value or even remotely informative, BUT they did annoy me by repeating that fraudulent, misleading "230 MPG" BIG LIE. I challenged them on it, asked them if they saw the calculation of the 230, and, since it includes the electricity they burn, how much would the REAL cost of fuel be? They claimed ignorance, a (probably GM type) from the audience told me that the 230 includes "one full battery charge", and when I asked how much the electricity costs to charge the battery once, some wiseguy said "50 cents". However, the local station charged me $25 to charge my much smaller regular car battery...LOL.