No. This is a big gamble, I agree. But would you prefer we hand over to existing management $30BN+ of taxpayer funds and watch them come back in a year for even more money?
This is a management that, just a few months after asking for $18BN of government money, now has doubled that request to $36BN of government funds ($30BN from the US, $6BN from other countries), expects to burn $18BN of that cash in 2009, expects to stagger forward under $50-60BN of debt since it failed to secure the necessary bondholder concessions (plus a pension that is underfunded by some $20BN), and whose "recovery plan" assumes a market recovery to SAAR of 12.5MM units (versus 9.1MM SAAR currently) as well as almost no further share loss. Is that a viable recovery plan? - doesn't sound like it.
Looks to me like the govt is saying to management, this was the last straw - while it is willing to provide the necessary money to save GM, it has no faith in management. It also seems to be telling the bondholders, this is your last chance - give the necessary concessions voluntarily, or see your debt wiped out in bankruptcy.
I understand you don't like the fact that the govt in effect fired Wagoner. But who were you expecting to fire him? The Board - who has insisted that he was on the right track for all these years? The shareholders - who have either given up, or are hedge funds trading in and out for 40 cent moves?
The govt gave GM $9BN in late 2008 and earlier this year, so that GM would have time to come up with a viable recovery plan. GM didn't do it. Goodbye, CEO and Board.
Quote:
Originally Posted by pwd72s
I'll ask you, John...since you seem fully in support of Government now managing GM...
Can you name one Government run automobile company that has been successful?
It's not about Wagoner's head rolling...it's about who fired him...
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