Since we all (as taxpayers) now own some of GM (properly referred to as "Government Motors"), it's appropriate to consider the potential for success of this investment.
My prognosis? Not too damned good.
Why?
1) The government is good and truly controlling the destiny of the company, putting its fingers into every part of the companys operation, including product decisions, marketing decisions, and the like.
Obama may have said he has no interest in running GM, but the same can't be said for his minions in the Environmental Protection Agency, the Department of Labor, and many others.
Decisions best left to seasoned auto men (and women) are instead being made by agenda driven bureaucrats.
The government is the ultimate authority for the company.
2) GM is now a private company, with no shareholders to answer to.
It answers only to the government, not to the profit motives and fiscal responsibility of investors.
3) GM no longer has to answer to financial institutions or institutional investors.
The government has guaranteed all of the risk for these institutions, so they have no reason to demand reasonable fiscal governance.
4) GM continues to institutionalize the thinking and decision making processes that got it in trouble in the first place.
Promoting from within will not solve the problem.
It will only be seen as rewarding the behavior and politics tha are the problem.
5) The unions who have contracts with GM now are also owners of the company.
When they sit down to negotiate a labor agreement, it will be a prolonged disaster as the unions try to come to grips with this new conflicting role.
6) The inter-governmental influences on the company are now vastly increased, as evidenced by the recent attempt to lose the costs of the Renaissance Center headquarters.
Trying to cut costs, the company wanted to move everyone out of their headquarters in downtown Detroit to the GM Tech Center in suburban Warren, where the company owns vast amounts of empty offices.
Doing so would have substantially cut overhead.
But, the Detroit government leaders leaned on the White House, so the company is now moving only a portion of the execs out of their rented quarters.
7) The numbers just don't make any sense.
Financial analysts have said that $83,000,000,000 is what New GM would have to be worth in order for us to break even on our investment.
But $56,000,000,000 is what GM was worth at its all time peak in 2000.
And the market for new cars is a long way away from what it was in 2000.
My bet is that once healthcare reform is pushed down our throats so that the unions don't have to assume all the unfunded healthcare costs, GM will be allowed to go bankrupt.
As it should have before the government bailed it out.
"Neither situations nor people can be altered by the interference of an outsider. If they are to be altered, that alteration must come from within.” --- Ronald Reagan
