ANALYST DOES A U-TURN

[CARBIZ]

thestreet.com

A reasonable explanation for some of the chaos being reported. Perhaps Bush should bomb Iraq to get GM/Ford off the front pages?

[ZL-1]

A $2bn dollar annual cost saving (just as an example) can have a tremendous impact on valuation. It's not very hard to make a valuation model go from $0/share to $50/share, depending on how optimistic your projections are.

Edited November 12, 2008 by ZL-1

[FUTURE_OF_GM]

Lache is as big of a wall street piece of $h! as they come.

These "ANALysts" that LITERALLY pull out of thin air and spread it through the doomsday machine that is the american media, have WAY TOO MUCH POWER!!!!

This guy has singlehandedly dictated the price of GM now for what 2-3 years.

EFF THAT! These greedy people on Wall Street HAVE to be stopped.

[Camino LS6]

Questionable credibility to say the least.

[black02]

thestreet.com

A reasonable explanation for some of the chaos being reported. Perhaps Bush should bomb Iraq to get GM/Ford off the front pages?

It's your turn. Have Harper do it

[CARBIZ]

It's your turn. Have Harper do it

What are we going to drop on Iraq? Moose? With what? Bush planes? (oooh, that's an unintentional pun!)

[ZL-1]

I find something funny, odd and interesting at the same time in the replies here... everyone criticizes the result but no one has wondered about the assumptions...

Is it a macro thing? Sales/revenue assumptons? Cost cutting/control assumptions? A combination of all of them?

Edited November 13, 2008 by ZL-1

[CARBIZ]

What is happening today is a lack of confidence thing, with respect to the global money markets. This latest blow is totally beyond GM's control. When the banks won't loan money to each other, they sure as hell won't loan to a troubled company like GM.

Setting aside the 'mistakes' GM made in the '80s, I don't think many people can imagine how difficult it is in any corporate structure to plan for downsizing. First of all, the mindset in business schools for, like, decades now does not teach how to 'wind down' a company. Even if you were on the Board of GM in the '80s and were terrified of the Acura Legend, you would have been a lonely voice in the wilderness if you'd advocated closing factories, shutting down brands, getting rid of dealers. Frankly, the 40 years or so that GM 'owned' the market in North America is pretty much unprecedented. Even the so-called Ford/Chevy wars of the '50s were beside the fact that GM's other 4 divisions handily outsold the entire Ford company in their own rite.

There isn't a UAW management team in existence who would have been voted back if they'd given concessions in the '80s. Unfortuntely, capitalism like democracies in general, tend to govern by crisis. I suspect that Wagoner and others new by the late '90s that the writing was on the wall and started taking evasive action. Too little, too late? Certainly.

I can't wait for Wagoner to publish his memoirs at a later date. It will be a good read, I am sure.

[enzl]

What is happening today is a lack of confidence thing, with respect to the global money markets. This latest blow is totally beyond GM's control. When the banks won't loan money to each other, they sure as hell won't loan to a troubled company like GM.

Setting aside the 'mistakes' GM made in the '80s, I don't think many people can imagine how difficult it is in any corporate structure to plan for downsizing. First of all, the mindset in business schools for, like, decades now does not teach how to 'wind down' a company. Even if you were on the Board of GM in the '80s and were terrified of the Acura Legend, you would have been a lonely voice in the wilderness if you'd advocated closing factories, shutting down brands, getting rid of dealers. Frankly, the 40 years or so that GM 'owned' the market in North America is pretty much unprecedented. Even the so-called Ford/Chevy wars of the '50s were beside the fact that GM's other 4 divisions handily outsold the entire Ford company in their own rite.

There isn't a UAW management team in existence who would have been voted back if they'd given concessions in the '80s. Unfortuntely, capitalism like democracies in general, tend to govern by crisis. I suspect that Wagoner and others new by the late '90s that the writing was on the wall and started taking evasive action. Too little, too late? Certainly.

I can't wait for Wagoner to publish his memoirs at a later date. It will be a good read, I am sure.

Leadership is defined as an ability to lead people where they don't want to go.

I agree that the latest crisis is a macro-event that is beyond GM's control--entirely. But that doesn't mean that current management should get a free pass. If RW is as smart as most believe he is, than all he needed to do was take a look at the books 8 years ago and conclude that a day of reckoning scenario was not just possible, but likely, given GM's structural issues.

[thegriffon]

Unfortunately it took the beginnings of that day of reckoning to appear to convince the UAW of that. Until then all they could do is what they did—focus on the product. It's not like they weren't been asking for concessions until last week. What would you have had him do? File for bankruptcy 8 years ago?

[enzl]

Unfortunately it took the beginnings of that day of reckoning to appear to convince the UAW of that. Until then all they could do is what they did—focus on the product. It's not like they weren't been asking for concessions until last week. What would you have had him do? File for bankruptcy 8 years ago?

First, I would have opened the books to the UAW years ago--have them sign NDA's and away we go---the structural deficiencies were there.

Second, I would have gone with the shared pain/shared pleasure offer--simply put, when things are tough, everybody eats a sh!t sandwich--mgmt, workers, shareholders---when times are good, bingo!--everybody gets paid.

Now, here's what really happened:

The Rickster didn't want to admit that the structural problems could doom the company--the share price would have dropped dramatically, his job placed in jeopardy and his obscene bonuses would have seemed inappropriate. As would the lavish perks. Instead, he figured we keep this thing lurching forward, execute the best, most profitable product plan in the SHORT term (i.e. big trucks) & hope for the best.

But he couldn't make hay while the sun shined--the erosion of market share here, the loss inducing acquisition of distractions, the underestimation of the competition--ALL his fault. They LOST $ while the market expanded. How is that good?

Sorry. Intellligent decisions could have averted this extreme result.

[GXT]

Lache is as big of a wall street piece of $h! as they come.

These "ANALysts" that LITERALLY pull out of thin air and spread it through the doomsday machine that is the american media, have WAY TOO MUCH POWER!!!!

This guy has singlehandedly dictated the price of GM now for what 2-3 years.

EFF THAT! These greedy people on Wall Street HAVE to be stopped.

Don't worry, GM will have the final say when they take it to 0 themselves.

[CARBIZ]

Leadership is defined as an ability to lead people where they don't want to go.

I agree that the latest crisis is a macro-event that is beyond GM's control--entirely. But that doesn't mean that current management should get a free pass. If RW is as smart as most believe he is, than all he needed to do was take a look at the books 8 years ago and conclude that a day of reckoning scenario was not just possible, but likely, given GM's structural issues.

Is that not what he did? Lutz came along 7 years ago. Olds disappeared 5 years ago (although planning for that must have occured at least 7 or 8 years ago). All the product cycles were accelerated. I venture to say if not for the market meltdown of '08, GM would be well on its way to profitability again.

Wagoner and Obama are going to have a lot in common with respect to their biographies: both inherited structural messes and both their tenures will be dominated by other people's legacies, not creating their own.

[CARBIZ]

First, I would have opened the books to the UAW years ago--have them sign NDA's and away we go---the structural deficiencies were there.

Second, I would have gone with the shared pain/shared pleasure offer--simply put, when things are tough, everybody eats a sh!t sandwich--mgmt, workers, shareholders---when times are good, bingo!--everybody gets paid.

Now, here's what really happened:

The Rickster didn't want to admit that the structural problems could doom the company--the share price would have dropped dramatically, his job placed in jeopardy and his obscene bonuses would have seemed inappropriate. As would the lavish perks. Instead, he figured we keep this thing lurching forward, execute the best, most profitable product plan in the SHORT term (i.e. big trucks) & hope for the best.

But he couldn't make hay while the sun shined--the erosion of market share here, the loss inducing acquisition of distractions, the underestimation of the competition--ALL his fault. They LOST $ while the market expanded. How is that good?

Sorry. Intellligent decisions could have averted this extreme result.

Oh, please: NDAs??? There are leaks all over the web (including right here on C&G) from paint plants being built at Springhill to the GMT-900s. There was every reason to expect (up until '04 anyway) that GM was on-track to keeping its 25%+ market share, etc.

From what I've seen, Fiat was the biggest fiasco on his watch, but I don't think we know exactly what went on with that plan. Maybe GM saw an opportunity (like Daewoo) to knock out a competitor and/or gain market share. Wagoner is merely an accountant, not a lawyer, too. LOL

Also, the dividend could have been suspended sooner, but then Wagoner's title was CEO, not President, and as CEO he is supposed to shore up share value. One of the easiest ways to maintain share value (short term) is to pay a dividend.

It's too bad there aren't any disgruntled Toyota board members or plant workers to post on English language blog sites so we can hear as much dirt about Toyota's dirty laundry as we do about GM and Ford's.

[regfootball]

they'd shoot the people who bemoan toyota, or force them to shoot themselves.