Living in the Detroit area, I can attest that even a slight tremor in the system is just as much of a Butterfly Effect as a Domino Effect. There are dozens or even hundreds of shops within a mile of anywhere in this area, all doing something automotive. Some big, some small, some have automotive as their main source of income, but a few use it as supplemental. Regardless, when things started coming apart a few years ago, a lot of places went under very quickly, and that impacted the entire industry...not just one auto manufacturer. It is a big machine, and each part is important.

I for one am glad Ford is doing well. It shows it can be done. GM is looking better, IMO. Again...it can be done. I just hope the momentum continues with smart decisions and good planning. The big machine just takes time to get up to optimal speed.

 

You cannot compare a sale of a company with a sale or transfer of assets. Apples to oranges. Legally, morally and common sense says that General Motors Corporation is now Motors Liquidation Co.

 

GM says that, too. They are General Motors Company now.

Nonetheless, I think that they are still entitled to the full heritage of the previous General Motors Corporation as they are the guardians of that heritage.

When the employees bought out Fender Electric Instrument Manufacturing Company it only included the IP of the company, not any of the manufacturing facilities or other real property. But I would say if I buy a Stratocaster today from Fender Musical Instruments Corp. that was created by the buyout, I'm buying it from the "same" company that made the first Stratocaster in 1954.

General Motors Company is now the trustee of the heritage that belonged to General Motors Corporation.

 

I agree.

 

This just mentioned in another thread...

Bailout saved 1 million jobs

I wish it didn't have to happen, but based on what I am reading...I am glad it did.

 

Actually, this is not true. A risk analysis manager at JP Morgan was in the room during Fords mortgage talks. The deal that was offered to Ford was also offered to GM.

Fords management was very humble, owned up to their failures in the past, and presented the blueprint to turn the company around.

GM's management laughed in the face of the bankers. They said there was no way that GM would EVER need their HELP, as they were, after all............. GM. Even after being told that there would be a recession coming (cyclical, remember), they thumbed up their noses and said no.

Fast forward to 2008, when they approached the same bankers, telling them that they WOULD give them money. No humbleness, no admissions of failure, no detailed plan to turn around. They would get the money, just based on the fact that they are GM. The bankers said no.

This isn't just about luck, and it isn't just about timing. It is about a complete polar opposite in attitude and arrogance. As the JP Morgan man said, any dealing with GM's executives was a nightmare, with Fords executives being the exact opposite.

Fast forward again, to today. If the economy were to double dip, Ford would be able to get money anywhere they like. They pay their bills, and do what they say they will. GM............ well, that would remain to be seen.

This is not a slam against todays GM, in any way. It is just a snapshot in what actually happened in those timeframes. It is not often that you get intimate inside accounts. Frankly, to have been a fly on the wall in those days, would have been fascinating.

For GM to lose their stigma, they will need to pay back every penny, with interest. Even if the stock sales does not pay it all back, GM should pay it out of pocket. Only then will the monkey come off their back. Are they legally obliged to do this.............. no. Morally............... yes.

 

JP Morgan don't seem too gun-shy on the "new" GM. Well, at least their Vice Chairman doesn't. He fought hard to get a piece of the GM IPO - and just bought a ZR1.

THE RETURN OF THE BANKERS

By this spring, James Bainbridge Lee was back.

Known as Jimmy at his bank JPMorgan Chase and to his many clients, Lee had returned to a familiar spot: negotiating with the Obama administration over a deal stemming from its bailout of the U.S. auto industry.

A 35-year Wall Street veteran, Lee was the point man in high-stakes, but failed negotiations between a group of creditors and the Obama autos team to keep Chrysler out of bankruptcy in 2009. Just over a year later, he was jockeying for a piece of the GM IPO, potentially one of the largest and most prestigious IPOs ever...

But by 2010, Lee shifted his attention to the GM IPO. "It's high profile. Jimmy loves high profile," said one person involved in the deal. As a sign of his enthusiasm, Lee took to showing off pictures of his brand new Corvette ZR1, GM's fastest production car ever, priced at $120,000.

"He's done that since day one. He's been shameless about it. 'Look at the car I bought,'" the person said.

http://www.reuters.com/article/idUSTRE69U0X820101031

 

Big difference between lending money and skimming......I mean brokering a trade. One has risk, the other is free money.

 

But there's also a big difference between "Look at my 150K GM Car" and "I wouldn't be seen in the same room as those guys."

 

Well when your firm makes 250,000,000 million off of one quick brokerage deal, it's easy to have a change in heart.

 

Good point there. And I guess in a way you could say he bought it with GMs own money...

 

That's quite a racket to be in, to make 250,000,000,000,000 off one deal!

 

There were 5 brokerages who got in on the GM IPO. Their take was roughly 10% of the entire deal.