"What's good for General Motors, is good for America!"

[adios]

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Since when is firing people a good thing for GM????????????????

IMO they'd much prefer to be making a profit, growing sales, and hiring new employees.

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It's good if you are an executive at GM and you aren't the one losing your job [img]/images/graemlins/smile.gif[/img]

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I get it companys don't need management, they just run themselves. Ok sure. As Cyrus pointed out GM execs have taken pay cuts.

[lehighguy]

Bad Management + Greedy Employees = You Lose

What happened was destined.

[sam h]

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Bad Management

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There is the real problem in this case.

[lehighguy]

The "real" problem. I thought it was complex. Thanks for boiling it down.

I remember this subject title being credited to Charlie Wilson when he was with GM. I just checked the ole fave Wikipedia and found this...

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At one point GM was the largest corporation ever in the United States, in terms of its revenues as a percent of GDP. In 1953 Charles Erwin Wilson, then GM president, was named by Eisenhower as Secretary of Defense. When he was asked during the hearings before the Senate Armed Services Committee if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation "because for years I thought what was good for the country was good for General Motors and vice versa". Later this statement was often garbled when quoted, suggesting that Wilson had said simply, "What's good for General Motors is good for the country". At the time, GM was the one of the largest employers in the world – only Soviet state industries employed more people.

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A lot of folks always clamor to blame whoever is in the Oval Office for all the problems in the country. Usually those who didn't vote for him.

GM's problems can't be blamed on one single person, group of people, incident or area of operation. It's an example of synergy. And GM is an example of what happens, and will happen, when short-term results are the goal. It's true in business, politics and life.

There's more than enough blame to go around. And GM isn't the only company in trouble or headed in that direction because the same mistakes they've made are being made elsewhere.

[adios]

Fitch Ratings said the plant-closing plan General Motors Corp. unveiled this week doesn't go far enough to return the auto maker to positive cash flow in 2006, one of several signs that Wall Street isn't satisfied with the effort.

FYI

Fitch Takes Dim View of GM Moves

Cost-Cut Plan Falls Short,
Ratings Agency Says;
More Pressure on New Line

Fitch Ratings said the plant-closing plan General Motors Corp. unveiled this week doesn't go far enough to return the auto maker to positive cash flow in 2006, one of several signs that Wall Street isn't satisfied with the effort.

The reaction from ratings-firm Fitch, which already has a "junk" credit rating on GM debt, helped spark a selloff in GM shares yesterday that took the stock down 31 cents, or 1.3%, to $23.27 at 4 p.m. in New York Stock Exchange composite trading.


Wall Street's cool reaction to the plan, which is made up of about $7 billion in health-care cuts, plant closings and other measures, keeps Chairman and Chief Executive Rick Wagoner under pressure and raises the stakes for a new line of sport-utility vehicles and trucks that he is counting on to boost sales early in 2006.

Mark Oline, managing director of Fitch, said achieving the $7 billion in cost savings "may not be sufficient alone" for GM to return to positive cash flow, adding that a number of factors could eat into GM's projected savings.

"The $7 billion has been outlined as their [savings] run rate, but it will take them some time to achieve that," Mr. Oline said in an interview. "And if you look at the cost side, with GM's health care increasing $400 million to $500 million a year, their cash outlays for health care may actually still be up over the next several years."

Mr. Oline said the savings could be eaten up by other factors, including payments that GM may need to make to meet obligations to Delphi Corp., GM's No. 1 supplier and former parts unit that last month filed for Chapter 11 bankruptcy protection.

"Cash may be required to resolve the Delphi situation, and our assumption is that GM may be forced to step in and bridge the gap between Delphi and the [United Auto Workers] position in order to ensure continued production at Delphi," he said. "In the short-term, our rating is very focused on the resolution of the Delphi situation."

Although GM's board is standing by Mr. Wagoner, he could come under increasing pressure if Las Vegas investor Kirk Kerkorian pushes ahead with demands for a board seat. Mr. Kerkorian owns 9.9% of GM, and with the latest fall in the share price his investment has lost roughly between $350 million and $375 million of its value. A spokeswoman for Mr. Kerkorian declined to comment.

Some Wall Street analysts also voiced skepticism to GM's plant-closing announcement, saying it won't make much of a difference without a significant run-up in sales.

"How many times in the last 20 years has GM had a meaningful restructuring announcement, but it hasn't been followed up by higher stock prices?" said David Sowerby, portfolio manager for Loomis Sayles, a Bloomfield Hills, Mich., money-management fund with $70 billion in assets, including some GM debt. "Plus there is still very low visibility about earnings in the auto industry, so expectations aren't really high."

GM said its health-care plan will reduce cash outlays by $1 billion a year for the foreseeable future, bringing its health-care expenses down by $3 billion by 2007. But because GM also plans to contribute $1 billion in 2006, 2007 and 2011 to a trust that will be used to defray some of the higher health-care costs that retirees will bear, the first few years of expense savings will be canceled out, Mr. Oline said.

But GM spokeswoman Toni Simonetti said the health care and plant-closing actions "are meant to take costs out of our cost structure" and "should have a positive effect on earnings going forward."