About the Author

Richard Cochrane is trained in chemistry and metallurgy but is far more interested and practiced as a political and fund raising consultant, writer and amateur historian. He grew up in a Navy family and with his two younger brothers carried on its 500+ year tradition of naval service to Great Britain and the USA then enjoyed a career with one of the largest advertising and public relations agencies working with numerous Fortune 500 companies and many of America's premier educational institutions. He maintains friendships and acquaintanceships around the world. He lives in Santa Barbara, California.

See All Posts by This Author

GM CEO Predicts Bankruptcy

May 4th, 2008 • Richard Cochrane

Decades of Bad Decisions

In a letter to shareholders General Motors’ Chairman and CEO Porter Stansberry says he sees light at the end of the tunnel but it is a GM bankruptcy and that a company cannot suffer 40 years of bad decisions, bad ideas, and bad debts and expect to compete with the rest of the world’s automakers.

He says, “what’s killing us is a legacy of debts and obligations we cannot possibly repay.” Stansberry says, “nor do we have any pleasant way to repudiate our promises. The only answer is bankruptcy.” He likens it to promises made under Social Security saying, “we cannot make enough money selling cars to afford the service on our $33 billion debt load, ” and “or the $11 billion we owe in cash pensions. These debts are killing us.” He thinks, “we’ve finally entered the end stage – the death spiral.”

“Given our current burn rate, I estimate we will declare bankruptcy in a little more than three quarters, “he predicted.

Toyota pays workers $43 an hour to make cars in the U. S. but the United Auto Workers demand $67 an hour from GM, Ford and Chrysler. Plus, they make cars that consumers judge to be inferior. Turn out the lights the party is over in Detroit, and Dearborn.

Last 5 posts by

Post a Response