Andy
03-31-2009, 11:54 PM
http://image.motortrend.com/f/18051423+w315/image.jpg
DETROIT - Fritz Henderson, General Motors' new chief executive officer, noted he has worked for the automaker for 25 years and that Rick Wagoner is/was his mentor. His management style is cut from the same cloth as that of his recently departed boss. Henderson will keep his $1.3-million salary this year. He won't reduce it to $1 this year like former chairman and CEO Wagoner (http://www.ctsvforum.com/6502623/corporate/end-of-the-road-for-gms-rick-wagoner/index.html), who now gets a $20-million "retirement" package instead. So what did we get out of car czar Steven Rattner's request -- demand -- that Wagoner step down? We've lost the last barrier to Chapter 11 for GM.
Answering a question I fumbled at the end of his first press conference as GM's new CEO Tuesday morning, Henderson said this about the prospects the company will file for an "organized" Chapter 11 at the end of its 60 days: "Certainly more probable. It's not our preferred strategy, and we do think we are capable of doing it out of court. But given the expectation particularly in terms of having a healthier balance sheet, it might very well drive us into that as the strategy we need to employ."
Henderson spoke about his proclivities toward a bankruptcy compared with his mentor, who rejected the idea at every turn. "I've watched some bankruptcies work," Henderson said. "I've found them to be generally sloppy and value-destructive so I think I've learned about, you know, what are the risks of bankruptcy.
"I think the issues will be how do we work together to make it more successful. If I didn't want to be part of a bankruptcy, I would have said 'no.' They asked me to do this job, and they asked me to be part of the team, extended team...suppliers, dealers to make General Motors successful, whatever it takes. And that's what I'm going to do."
Monday morning, Obama removed the barrier that Wagoner -- who had resigned hours earlier -- used to reject calls for an organized bankruptcy by promising to back automakers' warranties. You don't have to worry about the warranty of your new Cadillac CTS or Chevy Silverado if it's government-backed.
http://image.motortrend.com/f/17210470+w315/image.jpg
On Tuesday, GM announced its Total Confidence customer protection package (http://wot.motortrend.com/6504285/auto-news/gm-adds-total-confidence-customer-program-to-new-vehicle-buys-will-it-work/index.html), its answer to Hyundai's Assurance program (Ford also announced its version, the Ford Advantage Plan (http://wot.motortrend.com/6504309/marketing/ford-advantage-plan-covers-payments-for-12-months-for-recently-jobless/index.html), Tuesday as well). As of Tuesday, no one had lost a job and returned a car to Hyundai. As the company points out, a buyer must be vested in the car for two months before making a claim, and it launched the program in January.
GM requires a new owner make three payments before making a claim, and the program is good only for cars and trucks purchased in April, so far. Like Hyundai, GM's program is administered through a second party company. GM will make up to nine payments of $500 in 24 months of coverage.
So the earliest any new Chevy Malibu or GMC Acadia owner could make any claims would be July. By then, GM could be emerging from orderly bankruptcy reorganization, if you believe proponents who say it could be done in a month.
Proponents include conservative congress members and organizations.
Since Rattner "fired" Rick Wagoner last Friday, I've heard many cries of "socialism!" from the man/woman on the street and from some of my peers. Conservatives fear that more loan guarantees for GM and Chrysler amounts to nationalized automakers. Angus MacKenzie tackles that subject in his blog post (http://www.ctsvforum.com/6504588/editorial/gm-and-chrysler-pragmatism-not-socialism/index.html).
The administration's promise of considering more TARP-like bailout money is, I think, a red herring. In 60 days, GM must cut bond debt, negotiate a better deal with the United Auto Workers, and close Saturn in an impossibly short time. (http://www.ctsvforum.com/6481942/government/obama-60-days-to-a-gm-bankruptcy-30-for-chrysler-to-join-fiat/index.html) There's plenty of room for the auto task force to reject any intensive effort on Henderson's part as "not good enough." Conversely, the Right has praised Obama's statement Monday that helping GM and Chrysler "may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger," according to Slate.com.
"So far it's talk, but it's encouraging talk," said the Heritage Foundation's James Gattuso. It "struck the right chord in seeking balance between supporting the American auto industry and calling for a much-needed restructuring of GM and Chrysler."
I've not been a fan of calls for Chapter 11 to this point. The situation has changed, though, and not just Obama's warranty pledge. GM creditors have been intransigent in taking stock and 30-cents on the dollar for their bonds. American taxpayer support for automaker "bailouts," never popular, has slid to somewhere below 20 percent according to the polls. Fiat could scoop up 35- to 55-percent of Chrysler, and though I fail to see how that'll work better than DaimlerChrysler, it makes the Cerberus problem someone else's problem, not the taxpayers'.
And Rick Wagoner has left the building. A GM Chapter 11 is inevitable.
More... (http://blogs.motortrend.com/6504978/editorial/wagoner-gone-warranties-guaranteed-bankruptcy-inevitable/index.html)
DETROIT - Fritz Henderson, General Motors' new chief executive officer, noted he has worked for the automaker for 25 years and that Rick Wagoner is/was his mentor. His management style is cut from the same cloth as that of his recently departed boss. Henderson will keep his $1.3-million salary this year. He won't reduce it to $1 this year like former chairman and CEO Wagoner (http://www.ctsvforum.com/6502623/corporate/end-of-the-road-for-gms-rick-wagoner/index.html), who now gets a $20-million "retirement" package instead. So what did we get out of car czar Steven Rattner's request -- demand -- that Wagoner step down? We've lost the last barrier to Chapter 11 for GM.
Answering a question I fumbled at the end of his first press conference as GM's new CEO Tuesday morning, Henderson said this about the prospects the company will file for an "organized" Chapter 11 at the end of its 60 days: "Certainly more probable. It's not our preferred strategy, and we do think we are capable of doing it out of court. But given the expectation particularly in terms of having a healthier balance sheet, it might very well drive us into that as the strategy we need to employ."
Henderson spoke about his proclivities toward a bankruptcy compared with his mentor, who rejected the idea at every turn. "I've watched some bankruptcies work," Henderson said. "I've found them to be generally sloppy and value-destructive so I think I've learned about, you know, what are the risks of bankruptcy.
"I think the issues will be how do we work together to make it more successful. If I didn't want to be part of a bankruptcy, I would have said 'no.' They asked me to do this job, and they asked me to be part of the team, extended team...suppliers, dealers to make General Motors successful, whatever it takes. And that's what I'm going to do."
Monday morning, Obama removed the barrier that Wagoner -- who had resigned hours earlier -- used to reject calls for an organized bankruptcy by promising to back automakers' warranties. You don't have to worry about the warranty of your new Cadillac CTS or Chevy Silverado if it's government-backed.
http://image.motortrend.com/f/17210470+w315/image.jpg
On Tuesday, GM announced its Total Confidence customer protection package (http://wot.motortrend.com/6504285/auto-news/gm-adds-total-confidence-customer-program-to-new-vehicle-buys-will-it-work/index.html), its answer to Hyundai's Assurance program (Ford also announced its version, the Ford Advantage Plan (http://wot.motortrend.com/6504309/marketing/ford-advantage-plan-covers-payments-for-12-months-for-recently-jobless/index.html), Tuesday as well). As of Tuesday, no one had lost a job and returned a car to Hyundai. As the company points out, a buyer must be vested in the car for two months before making a claim, and it launched the program in January.
GM requires a new owner make three payments before making a claim, and the program is good only for cars and trucks purchased in April, so far. Like Hyundai, GM's program is administered through a second party company. GM will make up to nine payments of $500 in 24 months of coverage.
So the earliest any new Chevy Malibu or GMC Acadia owner could make any claims would be July. By then, GM could be emerging from orderly bankruptcy reorganization, if you believe proponents who say it could be done in a month.
Proponents include conservative congress members and organizations.
Since Rattner "fired" Rick Wagoner last Friday, I've heard many cries of "socialism!" from the man/woman on the street and from some of my peers. Conservatives fear that more loan guarantees for GM and Chrysler amounts to nationalized automakers. Angus MacKenzie tackles that subject in his blog post (http://www.ctsvforum.com/6504588/editorial/gm-and-chrysler-pragmatism-not-socialism/index.html).
The administration's promise of considering more TARP-like bailout money is, I think, a red herring. In 60 days, GM must cut bond debt, negotiate a better deal with the United Auto Workers, and close Saturn in an impossibly short time. (http://www.ctsvforum.com/6481942/government/obama-60-days-to-a-gm-bankruptcy-30-for-chrysler-to-join-fiat/index.html) There's plenty of room for the auto task force to reject any intensive effort on Henderson's part as "not good enough." Conversely, the Right has praised Obama's statement Monday that helping GM and Chrysler "may mean using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger," according to Slate.com.
"So far it's talk, but it's encouraging talk," said the Heritage Foundation's James Gattuso. It "struck the right chord in seeking balance between supporting the American auto industry and calling for a much-needed restructuring of GM and Chrysler."
I've not been a fan of calls for Chapter 11 to this point. The situation has changed, though, and not just Obama's warranty pledge. GM creditors have been intransigent in taking stock and 30-cents on the dollar for their bonds. American taxpayer support for automaker "bailouts," never popular, has slid to somewhere below 20 percent according to the polls. Fiat could scoop up 35- to 55-percent of Chrysler, and though I fail to see how that'll work better than DaimlerChrysler, it makes the Cerberus problem someone else's problem, not the taxpayers'.
And Rick Wagoner has left the building. A GM Chapter 11 is inevitable.
More... (http://blogs.motortrend.com/6504978/editorial/wagoner-gone-warranties-guaranteed-bankruptcy-inevitable/index.html)