Speaking to a congressionally-appointed panel in Detroit, car czar Ron Bloom said that the U.S. government does not want to run the operations of General Motors, and reiterated his belief that we will sell our stake in General Motors as soon as possible.

Meanwhile, CEO Fritz Henderson said that he plans to repay the government's loan within six years and would like to take the company public again in 2010. However, given that more than 80% of the original loan to GM has been converted into equity, repaying the loan is really not an impressive accomplishment -- and even that might not even be possible.

Continue reading Car czar says we'll sell our GM stake soon -- yeah, OK

Car czar says we'll sell our GM stake soon -- yeah, OK originally appeared on BloggingStocks on Tue, 28 Jul 2009 10:40:00 EST. Please see our terms for use of feeds.

A few weeks ago I appeared on CNBC's Closing Bell with Maria Bartiromo to discuss executive pay. One interesting point in the interview was when Ms. Bartiromo argued that it would be difficult to get good people to run big banks if their pay was limited because Wall Streeters are motivated primarily by money. I suggested that if that were true, then you would never see a former CEO of Goldman Sachs Group, Inc. (NYSE: GS) take the enormous pay cut required to become Treasury Secretary.

I am not sure what motivates Wall Streeters to take those pay cuts. But today, another prominent one -- Steve Rattner with whom I worked in the 2004 presidential campaign -- announced he is leaving his private equity firm, Quadrangle Group, and shipping off to Washington to work as Counselor to the Secretary (of the Treasury).

Continue reading Wall Street's moving to Washington

Wall Street's moving to Washington originally appeared on BloggingStocks on Mon, 23 Feb 2009 18:00:00 EST. Please see our terms for use of feeds.

Continue reading Obama drops 'Car Czar' plan

Obama drops 'Car Czar' plan originally appeared on BloggingStocks on Mon, 16 Feb 2009 11:20:00 EST. Please see our terms for use of feeds.

President Bush and his spokesman made it clear that loans to GM (NYSE: GM) and Chrysler may carry eventual Chapter 11 filings with them.

According to The New York Times, "The White House raised for the first time on Thursday the prospect of forcing General Motors and Chrysler into a managed bankruptcy as a solution to save the companies from financial collapse."

It's about time. The Administration has come around to the conclusion that many experts on restructuring have believed for months. The UAW, suppliers, and creditors cannot be forced to their knees without a bankruptcy judge standing over them.

The theory that a number of members of Congress wanted to adopt is that GM and Chrysler should get loans to carry them over to March 31, at which time they can present a "car czar" with restructuring packages. But what incentives do the union and creditors have to play ball? They may simply believe that the Obama White House will extend more loans to help the firms to the end of next year, which is hardly a way to induce those who need to give up economic benefits much incentive. It is human nature to hope for the best and ignore the worst. It is also a part of the UAW's history to adopt the arrogant attitude that it can run the car industry by dictating that its workers should get the best benefits in the world.

The only way to solve the car industry's problems is with one bold stroke. If people owed money and people owed pensions fall in the process, so be it.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Bush keeps Chapter 11 on the table for GM and Chrysler originally appeared on BloggingStocks on Fri, 19 Dec 2008 08:35:00 EST. Please see our terms for use of feeds.

Democrats want Volcker as car czar originally appeared on BloggingStocks on Thu, 11 Dec 2008 10:25:00 EST. Please see our terms for use of feeds.