Hi Chris,
On Jun 1, 2009, at 6:22 PM, Chris Hahn wrote:
Now, with a lessening of "legacy" union and retirement entitlements,
GM has a better chance at being successful. I am no automotive
business expert so I will answer the challenge in two ways.
Okay, but that dodges the political question: do you think the Federal
Government will be [perceived as] meddling in GM's operations, and if
so will that make (A) or (B) more likely? :-)
-- Ernie P.
A. Management at "new company" makes cars that customers want to
buy at a price that is competitive. Then, in 5 years the American
People's stock will be worth something and half of it will have been
sold for a profit, enriching the Treasury. In 10 years all of the
American People's stock will have been sold for a considerable
profit to the American People.
B. Management can't create competitive cars. Then, in 5 years we,
the American People, will have lost our investment and GM will be
liquidated in Chapter 7. At a certain point I think the Obama
administration will let GM fail. 10 years is a moot point.
Chris
From: [email protected] [mailto:[email protected]
] On Behalf Of Dr. Ernie Prabhakar
Sent: Monday, June 01, 2009 1:22 PM
To: Radical Centrist Discussions
Subject: [RC] Predictions? “The End of an Old GM, and the Beginning
of a New GM”
Okay, time to put your money where your mouth is. What is your
prediction for what the relationship between GM and the Federal
Government will be like in 5 years? 10 years?
-- Ernie P.
http://www.whitehouse.gov/blog/The-End-of-an-Old-GM-and-the-Beginning-of-a-New-GM/
That's why our government will be making a significant additional
investment of about $30 billion in GM -- an investment that will
entitle American taxpayers to ownership of about 60 percent of the
new GM.
Now, let me talk about this. I recognize that this may give some
Americans pause. So let me explain as clearly as possible why we
are making this investment. We inherited a financial crisis unlike
any that we've seen in our time. This crisis crippled private
capital markets and forced us to take steps in our financial system
-- and with our auto companies -- that we would not have otherwise
even considered. These steps have put our government in the
unwelcome position of owning large stakes in private companies for
the simple and compelling reason that their survival and the success
of our overall economy depend on it.
Understand we're making these investments not because I want to
spend the American people's tax dollars, but because I want to
protect them. Instead of taking so much stock in GM, we could have
simply offered the company more loans. But for years, GM has been
buried under an unsustainable mountain of debt. And piling an
irresponsibly large debt on top of the new GM would mean simply
repeating the mistakes of the past. So we are acting as reluctant
shareholders -- because that is the only way to help GM succeed.
What we are not doing -- what I have no interest in doing -- is
running GM. GM will be run by a private board of directors and
management team with a track record in American manufacturing that
reflects a commitment to innovation and quality. They -- and not
the government -- will call the shots and make the decisions about
how to turn this company around. The federal government will
refrain from exercising its rights as a shareholder in all but the
most fundamental corporate decisions. When a difficult decision has
to be made on matters like where to open a new plant or what type of
new car to make, the new GM, not the United States government, will
make that decision.
In short, our goal is to get GM back on its feet, take a hands-off
approach, and get out quickly.
_______________________________________________
Centroids mailing list: [email protected]
http://radicalcentrism.com/mailman/listinfo/centroids_radicalcentrism.com
Archives at http://radicalcentrism.org/pipermail/centroids_radicalcentrism.com/
_______________________________________________
Centroids mailing list: [email protected]
http://radicalcentrism.com/mailman/listinfo/centroids_radicalcentrism.com
Archives at http://radicalcentrism.org/pipermail/centroids_radicalcentrism.com/
