James Mackintosh wrote an interesting Financial Times article Wagoner says GM not heading for bankruptcy.
In a letter to the company's 325,000 employees sent on Wednesday, Mr Wagoner said it was "just plain wrong" to talk of GM filing for Chapter 11 bankruptcy protection from creditors. "I'd like to just set the record straight here and now," he wrote. "There is absolutely no plan, strategy or intention for GM to file for bankruptcy."
The letter follows a sharp fall in the company's shares and bonds amid fears of a strike at Delphi, the bankrupt parts maker which is GM's biggest supplier. In Thursday morning trading the shares hit an 18-year low of $20.80, close to the $20.44 low of Black Monday, the 1987 record stock market crash.
You got to be kidding. No executive ever admits to having serious difficulties. That simply is not in their genetic code. So why anyone would take this blather seriously is completely beyond me. If and when GM does hit the canvass, then we will hear about the valiant attempts that were made to save the company and that management truly believed that the company was salvageable.
Here are a couple questions stakeholders should ask themselves. One, has GM resumed aggressive sales incentives to most iron again after declaring that it was weaning customers off the incentive crack? And two, is GM well positioned to sell vehicles in a high price gasoline environment? In other words, is GM manufacturing vehicles that people want?
Those who read my weblog know that I believe GM has a difficult road to follow. And thus I remain short GM stock.
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