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Let’s Try Again on…GM

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G is for Gigantic M is for Meltdown

G is for Gigantic M is for Meltdown

It’s got to the point where all you have to do is ask, and the billions come flying your way just because “you’re too big to fail”. It’s not a lesson any of us mere mortals can use, but if you’re a great big dinosaur of a car company, go right ahead.

General Motors we’re told by their auditors is at substantial risk of bankruptcy. That is not news. But it’s a useful little nugget to use if you happen to be GM looking for more cash to delay your collapse. Everyone knows the Obama administration is going to pay up, because the alternative is just too bleak to consider. GM goes under, and takes down the entire supplier structure which would be a body-blow to the rest of the world car industry, not to mention the hundreds of thousands added to the unemployment rolls in states that are already on their knees.

It’s a forlorn hope, but at least we should be a little imaginative in how we hand the money out this time. After all, we’ve kind of got these guys by the short and curlies. All we have to do (on behalf of the taxpayer of course, is twist). Here’s how…

First idea. How about insisting on the replacement of the entire senior management team? Does Rich Waggonner deserve to keep his job? Of course not. Should he retire with his many millions? Absolutely. Could anyone do a better job. My six year old daughter has expressed an interest in the gig. She and various other very smart people should be considered for the GM team.

Second idea. Perhaps we could structure the next ‘loan’ this way. We get ordinary stock and nationalize GM’s legacy costs. Turn GM healthcare and costs into pilot scheme for a new healthcare system. Have the US underwrite GM’s pensions. With those two costs off the books, the company’s share price will bounce back, and we the people sell our stock.

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Written by coolrebel

March 5, 2009 at 11:07 pm

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