Continue reading General Motors prepares for bankruptcy -- Was Wagoner lying?

General Motors prepares for bankruptcy -- Was Wagoner lying? originally appeared on BloggingStocks on Tue, 07 Apr 2009 14:30:00 EST. Please see our terms for use of feeds.

So far the U.S. has committed $12.8 trillion to bailing out Wall Street. Does this mean that Wall Street CEOs made mistakes? Apparently not. Because if it did, the Wall Streeters who cost taxpayers all that loot would be out of their jobs.

A few have moved on -- consider Merrill Lynch's former CEO Stan O'Neal, who, after leaving the investment bank with a then-record $2.24 billion loss, received a "kick in the rear" amounting to a $161 million retirement package. (O'Neal is just one of the Harvard MBAs whose destruction of the global economy is prompting some navel gazing at HBS.)

Most, though, are still at their desks, gamely calling the shots. Yesterday, Treasury Secretary Tim Geithner suggested it could be time for that to change.

Continue reading Which Wall Street CEOs should walk the plank?

Which Wall Street CEOs should walk the plank? originally appeared on BloggingStocks on Mon, 06 Apr 2009 10:10:00 EST. Please see our terms for use of feeds.

Plenty of investors have been calling for General Motors Corporation (NYSE: GM) to be removed from the Dow Jones Industrial Average (DJIA) as the automaker hovers on the brink of bankruptcy. But, like it or not, GM's rock-bottom share price isn't justification enough to oust the stock. GM still represents a major chunk of our industrial economy.

However, GM's nationalization would more than justify its removal from the Dow. After all, that's why American International Group (NYSE: AIG) got the boot last fall -- once the government took a controlling stake in the insurance giant, Dow Jones wasted no time adjusting its blue-chip lineup.

Continue reading Will GM get booted from the Dow?

Will GM get booted from the Dow? originally appeared on BloggingStocks on Tue, 31 Mar 2009 11:50:00 EST. Please see our terms for use of feeds.

Last fall, I suggested that General Motors Corp. (NYSE: GM) ought to follow a six point restructuring plan. One of those steps was to can GM's CEO Rick Wagoner. Under his tenure, which began in 2000, GM's stock has lost 95% of its value and GM has posted $30 billion in 2008 losses while presiding over a North American market share slide from 33% to 19%. What amazes me is that GM's board did not step in years ago. So Monday, President Obama will officially ask Wagoner to step aside.

Continue reading Obama to GM CEO Wagoner: You're Fired!

Obama to GM CEO Wagoner: You're Fired! originally appeared on BloggingStocks on Sun, 29 Mar 2009 21:10:00 EST. Please see our terms for use of feeds.

Continue reading Big 3 CEOs drive to Washington to suck up to Congress

Big 3 CEOs drive to Washington to suck up to Congress originally appeared on BloggingStocks on Tue, 02 Dec 2008 10:10:00 EST. Please see our terms for use of feeds.

GM, Ford and Chrysler CEOs to present new plan tomorrow at U.S. Congress originally appeared on BloggingStocks on Mon, 01 Dec 2008 11:45:00 EST. Please see our terms for use of feeds.

Can GM CEO Rick Wagoner's lobbying help land federal bailout? originally appeared on BloggingStocks on Tue, 28 Oct 2008 13:12:00 EST. Please see our terms for use of feeds.

Is a GM / Chrysler bailout and merger really the way to go? originally appeared on BloggingStocks on Tue, 28 Oct 2008 09:25:00 EST. Please see our terms for use of feeds.

In 1945, when President Truman first proposed national health insurance, they [union leaders] cheered. In 1947, when Ford offered its workers a pension, the union voted it down. The labor movement believed that the safest and most efficient way to provide insurance against ill health or old age was to spread the costs and risks of benefits over the biggest and most diverse group possible. Walter Reuther [the national president of the U.A.W at the time]...believed that risk ought to be broadly collectivized. Charlie Wilson [president of G.M.], on the other hand, felt the way the business leaders of Toledo did: that collectivization was a threat to the free market and to the autonomy of business owners. In his view, companies themselves ought to assume the risks of providing insurance.

GM, Ford get in line for government funding originally appeared on BloggingStocks on Wed, 17 Sep 2008 15:15:00 EST. Please see our terms for use of feeds.

The New York Times reports that General Motors (NYSE: GM) wants a $50 billion bailout due to the credit crunch. It says it can't get the money it needs to build fuel efficient cars. But during the decade, when it was minting money from SUVs and trucks sales, GM could have invested those profits in fuel efficient products. Now that those profits have evaporated, it wants taxpayers to step in.

What kind of bailout does GM want? The Times reports it seeks $50 billion in government-backed loans to retool its plants to build fuel efficient cars. GM is not alone -- Detroit's automakers and the United Auto Workers (UAW) already requested Congress to "appropriate $3.75 billion to back the $25 billion in loans authorized last year." Now they want to double that amount and are "urging Congress to act by the end of September so that the money can be available next year." No doubt the industry is in trouble. The Times reports that "total sales for [August are forecast to be] 14.4 percent lower than a year ago and that G.M.'s sales [will drop] 27.5 percent."

But the economic logic for this taxpayer-funded bailout is tenuous. GM wants the government to leave it alone when it comes to fuel efficiency and it made huge profits on gas guzzlers before the price of oil shot up from $24 a barrel to $117. Thanks to GM's lack of investment in fuel efficient vehicles, its losses are soaring. Most recently it lost $4.4 billion and its revenues plunged 33% from $29.7 billion to $19.8 billion. It wants our money to make up for its bad management. Since its current CEO, Rick Wagoner, has taken over, GM's stock price has fallen 83%. But he still has the support of GM's board.

Continue reading Does GM deserve a taxpayer bailout?

Does GM deserve a taxpayer bailout? originally appeared on BloggingStocks on Fri, 29 Aug 2008 10:00:00 EST. Please see our terms for use of feeds.

General Motors unveils $500 millon Chevrolet Cruze; market yawns originally appeared on BloggingStocks on Thu, 21 Aug 2008 17:25:00 EST. Please see our terms for use of feeds.

General Motors (NYSE: GM) posted a $15.5 billion loss in its second quarter. This was much worse than analysts had expected. With its stock opening 8% lower, GM stock has lost 84% of its market value since CEO Rick Wagoner began that job on June 1, 2000. His failure to prepare GM for high gasoline prices, as Toyota Motors (NYSE: TM) has done, makes me wonder whether GM's board is asleep at the switch.

GM's North American results were really bad. The New York Times reports it lost $4.4 billion and its revenues plunged 33% from $29.7 billion to $19.8 billion. But Wagoner has promoted cost reduction plans. In June, Wagoner announced that GM would close four assembly plants making pickups and SUVs by 2010 and cut vehicle production by 500,000. Then, on July 15, he detailed a 20% cut in "salaried personnel costs, the elimination of health-care coverage for white-collar retirees past the age of 65, and cuts in advertising and marketing budgets and capital expenditures," according to the Times.

Some Administration officials have been touting the wonders of a cheap dollar as if that will save our industries from a collapsing domestic economy. They should think again. Meanwhile, it is a testament to Wagoner's board relationships that there have not been calls for a new CEO. There is absolutely no way that GM can cut its way to prosperity. He has led GM into a situation where his choices are to cut costs or to file for bankruptcy. During the booming SUV and truck years, Wagoner could have invested the profits in energy efficient vehicles.

His failure to do so has jeopardized GM and should end his role as its CEO.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

With a $15.5 billion loss, can GM or its CEO survive? originally appeared on BloggingStocks on Fri, 01 Aug 2008 09:39:00 EST. Please see our terms for use of feeds.

General Motors Corp.

Continue reading Who is going to want the assets GM is trying to sell?

Who is going to want the assets GM is trying to sell? originally appeared on BloggingStocks on Tue, 15 Jul 2008 11:03:00 EST. Please see our terms for use of feeds.

GM's Wagoner: No bankruptcy coming, no brands being killed originally appeared on BloggingStocks on Fri, 11 Jul 2008 11:46:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• Rick Wagoner, the CEO of General Motors Corporation (NYSE: GM), hit out against allegations that the auto maker may soon file for bankruptcy and said he believes the company's financial position will "remain robust" for the rest of the year. Wagoner also said, the Wall Street Journal reported, that the company has no plans to sell or reduce more of its brands.
• An independent Yahoo! Inc (NASDAQ: YHOO) would be better for the world, Google Inc (NASDAQ: GOOG) CEO Eric Schmidt said and the Financial Times reported. Yahoo! will be able to create more competition in the search market and other advertising markets if it stays independent, Schmidt contended.

• According to people briefed on the plan, the New York Times reported that senior Bush administration officials are weighing a plan to have the government take over either Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, or Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac -- or both -- and place them in a conservatorship if their problems continue or worsen.
• The New York Times also reported that people briefed on the matter said Anheuser-Busch Companies Inc (NYSE: BUD) is in active talks to sell itself to InBev in a friendly deal, despite previous hostility to the idea. One person said InBev indicated it may be willing to pay more than the $65 per share originally offered.

Newspaper wrap-up: U.S. considering government takeover of Fannie Mae, Freddie Mac originally appeared on BloggingStocks on Fri, 11 Jul 2008 08:00:00 EST. Please see our terms for use of feeds.

The Wall Street Journal was good enough to humiliate General Motors (NYSE: GM) CEO Rick Wagoner by pointing out that he still has his job. The company's share price is down almost 85% since he took over. The newspaper writes that Mr. "Wagoner's decision a few years ago to tilt GM's product mix more toward trucks and SUVs isn't looking good."

Fair enough. But there are two critical elements to Wagoner still having his corner office. One is that the rest of the US car industry is as bad off as GM, maybe worse. The other is that no CEO in his right mind would leave a good job to take over GM. Boeing (NYSE: BA) exec, Alan Mulally, moved to Ford (NYSE: F) as the head man and he must regret the decision every day.

Wagoner is part of the "dumbing down" of the American CEO. If the man can't do well, blame it on the industry. That makes it seem that individual companies are powerless to make decisions that will put them ahead of the competition, even in tough markets.

Tell that to the guys at Honda (NYSE: HMC).

Douglas A. McIntyre is an editor at 247wallst.com.

With GM down 83%, how does its CEO keep his job? originally appeared on BloggingStocks on Wed, 02 Jul 2008 10:59:00 EST. Please see our terms for use of feeds.

General Motors' (NYSE: GM) CEO Rick Wagoner has been kicked upstairs [subscription required], according to the Wall Street Journal. He will focus on international expansion and advanced technology. Not much of a job for a chief executive. Frederick Henderson will take over as COO and run the company's daily operation.

Wagoner's sin was that he could not launch products that would get GM back some of its market share in the U.S. He was able to cut costs and get an improved deal with the UAW, but GM's January sales were down over 12% in its home market. Its share in America is only about 25%. Toyota (NYSE: TM) has muscled GM out of its lead in small and mid-sized cars.

At this point, it does not matter who GM puts at the top of the company. There is a race between the company's growing sales overseas and its falling prospects in the U.S. But multi-billion annual losses in North America cannot be offset by the rest of GM's operations.

GM's stock is back near a multi-year low. The company began losing its war in the U.S. a decade ago and that can't be reversed by new management.

Douglas A. McIntyre is an editor at 247wallst.com.

GM's CEO Wagoner gets kicked upstairs originally appeared on BloggingStocks on Wed, 05 Mar 2008 08:45:00 EST. Please see our terms for use of feeds.

Rick Wagoner, the CEO of General Motors Corp. (NYSE: GM), continues to batten down the hatches at the world's largest automaker. Sales in 2008 are predicted to be fairly weak, and this isn't helped by the fact that the automaker's dealer network could be compared to McDonalds Corp. (NYSE: MCD): so many locations that they seem to be on every corner.

Wagoner needs to fix that, and the CEO said this week that its U.S. consumer sales network was not shrinking enough to correlate with the sales slowdown and product mix shift it's been experiencing. Hence, many dealers will need to consolidate faster than they have been, with the focus on combining Pontiac, Buick and GMC dealerships into one channel.

Continue reading Rick Wagoner: GM needs dealer consolidation nationwide

Rick Wagoner: GM needs dealer consolidation nationwide originally appeared on BloggingStocks on Thu, 24 Jan 2008 13:12:00 EST. Please see our terms for use of feeds.

General Motors cancels $4 billion credit line originally appeared on BloggingStocks on Wed, 09 Jan 2008 12:45:00 EST. Please see our terms for use of feeds.

The companies and union are taking their case to Capital Hill today at a private luncheon with leaders of the U.S. Senate to convince them to reconsider an overhaul of Corporate Average Fuel Efficiency (CAFE) standards, according to the Associated Press.

Let's hope that Senate Majority Leader Harry Reed has the guts to tell them to pound sand. The public is fed up with high gas prices and the growing problem caused by global warming. Even GM Chief Executive Rick Wagoner has acknowleged this reality, though the AP quotes him cryptically saying "let's make sure that we also fix the real problems while we're doing that."

Continue reading Auto industry CAFE whining falling on deaf ears

Auto industry CAFE whining falling on deaf ears originally appeared on BloggingStocks on Wed, 06 Jun 2007 14:43:00 EST. Please see our terms for use of feeds.