Friday

GM ready to emerge from bankruptcy

GM began its emergence from bankruptcy today, to continue operation as the “good” GM. As such, it finds itself with new owners: The US government will own about 61% of the company, and the remainder being split up among the Canadian government, a healthcare trust for the UAW, and bondholders.

Now if that sounds interesting it’s because it is. Despite the government holding well in excess of 50% of the company, they have vowed not to micromange things on a day-to-day basis. We’ll see.

Also, just because they’ve emerged from bankruptcy doesn’t mean things will be rosy from here. They still need to operate in a very hostile economic climate, or more to the point, the worst environment seen since the Great Depression.

While the executive ranks will be thinned out, there are still a lot of the same people operating as before. What GM needs is an entire overhaul in thinking and corporate culture. After all, we’ve already heard the “we’re different now speech” which became “no, this time we really mean it” and this time they promise they mean it.

While I wish them the best, I remain cautiously skeptical. Bankruptcy or not, you don’t immediately turn around and become different – not a company as large and complicated as GM anyway.

In any event, time will tell.

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