a round of disappointing earnings reports from Cisco and others,
General Motors actually had some good news to report yesterday.
Following it's May report of an $865M
USD profit -- its first profit since Q2
2007 -- GM has posted an
even bigger profit, announcing a net income of $1.3B USD on a revenue
of $33.2B USD.GM is also sitting on a stockpile of $32.5B USD
in cash -- leftovers from bailouts received from the U.S. and
Canadian governments, in addition to revenue for the sales of its
laggard brands like
Hummer.That was the good news. The somewhat
troubling news for GM was its announcement that CEO
Ed Whitacre was stepping
down. The quiet Texan had masterminded the company's
turnaround drawing on his long history of success as a senior
executive, and eventually CEO at AT&T.The news reportedly
stunned GM insiders.Equally surprising, perhaps, is the
choice for his successor. Whitacre will be replaced by former
Nextel CEO Daniel Akerson. Akerson, currently a private-equity
firm where he is a managing director with the Carlyle Group,
currently serves on GM's board.
is a firm proponent of electric vehicles. As public
buzz and anticipation grew about the 2011 Chevy Volt,
Akerson pushed hard for GM to increase production 50 percent.Some
are optimistic about the appointment. As a board member,
Akerson showed he wasn't afraid to sack people, pushing for
Henderson's resignation. Steven Rattner, former head of the
White House auto task force, comments,
"He's a no B.S. kind of guy, just like Whitacre. His whole
operating style is the antithesis of the old GM. It is hard for me to
imagine a better choice."But some fear that he's too
much of a financial man and lacks the necessary experience to lead GM
optimally. Paul T. McCartney, a managing director of Heritage
Search Partners Inc. in New York comments, "[His whole career]
"has been focused on making the numbers as best as you can and
[then] 'let's move on with the company in some other form.' [He
isn't] going to lay out the strategic future of General
Motors."From a purely statistical perspective, the odds
merely of Akerson keeping his position seem slim -- GM has had four
CEOs in just a year and a half.However, it's critical that
Akerson prove a decisive leader. GM is on the verge of
announcing a initial public offering of stock to repay the U.S. and
Canadian governments. That offering has now been put on hold as
account executives responsible for it reportedly race to change the
documentation -- something which gives you the idea of how unexpected
Whitacre's departure was.If Akerson can pull together and
repay the government via a successful offering he will offer
vindication to Democratic
President Barack Obama and his predecessor, Republican
President George W. Bush, who both chose to bet on GM, bailing
the company out at the taxpayer's expense. Such a success would
certainly elevate Akerson into the annuls of automotive executive
history.However, if the IPO disappoints and GM falters, don't
be surprised if Akerson becomes the latest GM chief to see the door
slam behind him.
quote: What's next? McDonalds goes belly up and we (the taxpayers) bail them out too? Where do we draw the line?
quote: He tried to exempt menthol cigarettes from the cigarette tax increase. Who smokes the most menthols?
quote: If what you are hinting at is true, wouldn't he really just be condemning them to a life of disease and premature death?
quote: You think that was funny eh? Not to surprising though, racist always think their racist jokes are funny to everyone. I assure you that I don't secretly think your so called joke is funny at all.
quote: The US is never "way better off" losing GDP. You lack a basic understanding of reality, while the government plays the shell game with money all the time, in the end it is for a purpose, to keep people productive. No matter what else happens it is crucial to keep the citizens producing valuable goods.
quote: The decisions made were based on expert review
quote: It is naive to think they could just be "chopped up and divided".
quote: other companies would go bankrupt too.
quote: No matter what else happens it is crucial to keep the citizens producing valuable goods.
quote: The decisions made were based on expert review, not arm-chair quarterback knee-jerk reactions like yours.
quote: In order to do a reorganization a very large financial institution would need to issue loans during the process.
quote: So there was no non-governmental organization that had the financial liquididity and temerity to underwrite a reorganization.
quote: TextOh yeah, and a million jobs would be lost in the following 3 months. That would have bankrupted hundreds of smaller firms that do business with GM (and Ford, and others) which would have rippled across the nation.
quote: So much for your argument.
quote: The free market simply DOESN'T WORK in the real world.
quote: someone tried to use the "buy american" argument on me the other day when explaining why he wanted a GM truck. i laughed. the only difference between "american brand" and "japanese brand" vehicles in today's market is where the HQ and ceo are located. and japanese CEO's make 1/10th or less of what average US ceo's make.
quote: So after being restructured by the federal government so that the unions own 60% of the company
quote: cutting 4 of the 8 companies under the GM name (thus putting half of their workers out on the street)
quote: they received millions in stimulus from the government after receiving money from the government to keep them from going bankrupt.
quote: They DID go bankrupt, remember?
quote: How many blank checks were handed to GM again?