GM CEO Fritz "Transparency" Henderson: We're Beating Secret Targets

Robert Farago
by Robert Farago

Transparency. It’s what GM CEO Fritz Henderson promised taxpayers in sworn testimony in front of Congress, post $52 billion bailout (and the rest). As TTAC pointed out previously, bullshit. After not releasing the dead dealer list promised to Senator Jay Rockefeller, the nationalized automaker is now proud to announce that it’s beating its targets—without revealing the targets. “General Motor Corp. is outperforming the targets set in its earnings viability plan outlined in April, CEO Fritz Henderson said today,” Automotive News [sub] said today. “Henderson declined to list the areas in which GM is outperforming but said the company would provide details in its third-quarter earnings report later this month. ‘I’m not going to get into whether we’re generating cash or not generating cash, but I would certainly say the situation is more stable than what the outlook was even just two months ago.'” And why should we believe His Opaqueness?

By his own admission, the answer certainly doesn’t include Henderson’s prognosticating skills.

“We didn’t know what was going to happen when we went into bankruptcy. Some might argue that we set the bar exceptionally low.”

Interesting. WHAT BAR? What targets did GM set? You know, specifically. Oh right; Henderson declined to say. So . . . what about that GAO reports that said GM would have to walk on water to achieve an 2010 IPO?

“They [theoretical investors] are going to get a return based upon principally the ability to generate value in the stock,” Henderson said.

Henderson said he is confident in GM’s ability to repay the $50 billion in financial support to the U.S. government. He said GM has a greater ability now to generate value in its stock than it did in the past because it has a stronger balance sheet and fewer liabilities such as health care expenses.

Henderson said: “It’s my fervent desire to show that the report was wrong.”

As the old expression goes, if wishes were horses beggars would ride free. Or something like that.

Robert Farago
Robert Farago

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  • SkiD666 SkiD666 on Nov 06, 2009

    Actually Steven02, anyone that read the article would understand why GM's incentive levels seemed high last month (assuming they take Fritz's word for it) "On U.S. incentives, pickups are a big driver of the discussion. We built '09 pickups longer for technical reasons. … I think that certainly we will see some moderation in incentives on the '10s as we clear out the '09s. …The other thing is that we are, as we reduced the inventory, we lowered the water level in so much of our inventory that (what) was remaining over aged. And, we are aggressively clearing out the over-aged stock which is a good thing to do. But it does take some money. And, it is funny when you think of it this way, if you ran 900,000 units of inventory and 30 percent of it over aged, then, you have 270,000 units of over aged inventory. When you run 400,000 units of inventory, that over age(d) (inventory) unfortunately, didn't diminish per rate. We are aggressively progressing. These (are) vehicles greater than 90 days and 120 days in the lot. Those two thing(s), over-aged (inventory) as well as pickup trucks, are what is driving the incentive levels reasonably higher. Higher than what we with like them to be today."

  • Steven02 Steven02 on Nov 06, 2009

    Exactly SkiD666. I was just pointing out to Robert who was saying that the higher value market share came out of incentives, which it might have. I was just saying, the incentives were mainly on trucks and not that big of a deal. There is a lot of margin there.

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