>by Don White
DETROIT – . says its restructuring plan is starting to take hold, they don’t need an installment of $2 billion in government loans for March.
Does this mean improving the fortune for the automaker? Yes, at least temporarily. The company points to plant closings in January and February for the reprieve. It may not lead to a profitable year for GM, however.
Chief Financial Officer Ray Young said Thursday that GM formally told the Obama administration’s autos task force on Wednesday that it wouldn’t need the money this month. Young told the Associated Press that this struggling automaker didn’t want to conjecture when it would need the money. The AP wondered if GM might reduce its need for so much money.
“It seems like our companywide cost reduction efforts are moving well,” said Young, “as well as we’ve been able to defer spending that we previously anticipated in January and February. I think that’s a positive development.”
All Americans don’t think GM is going to make it. And not all are positive about closing plants, especially the union workers. But what GM is now doing — what it was forced to do by the government — is what it should have done months and years ago. It should have closed plants and reduced the variety and number of models of GM vehicles. It should have sold Volvo earlier — or was it Saab?
A little foresight goes a long ways. Now not even the Swedish government want Volvo back. Timing in business is everything, and so far Young and the GM CEO have proven they lack the foresight and ability to see the future. My guess is that most of GM’s current management will be looking for new jobs and some kid from Harvard will be given the reigns. Actually, the board could go down to the high school era and come up with someone smarter than GM’s current management.
It is most Americans’ belief that the stupidity displayed by GM qualified it for failure and that we the people shouldn’t have bailed them out. We should have let them fail, because if they fail to hire some smarter people they will surely fail — and be unable to pay us taxpayers back.
GM management doesn’t have a monopoly on lack of foresight — the Barney Franks, Nancy Pelosis, Chuck Schumers, and Harry Reids of the world should also be thumped on the head a time or two for lack of brainpower — and next election thrown out of office.
Democrats arise! And you Republicans who voted for those 8,500 earmarks in the last funding bill should be sumarily court marshaled, fined, have your heads placed in a hole in the wall for kids to throw pies at you. You are as worthless as the Democrats. Yes, I’m mad. As a taxpayer when I see waste I get upset. But when I see fraud and corruption, I get livid.
GM, which is living on $13.4 billion in government loans, has requested another $16.6 billion as it tries to weather the worst auto sales slump in 27 years.
Young said GM’s cash burn rate, the amount of spending above revenue, has slowed since the company submitted a viability plan to the government on Feb. 17.
“The cash burn that we thought we were going to have in January and February is not as high. Clearly we still have a cash burn,” he said, attributing the burn rate to a lack of revenue from the company shutting down many of its factories for the month of January.
GM had asked for $2 billion in March and another $2.6 billion in April. It would not need any more money until 2011 when a $4.5 billion revolving line of credit comes due. The company also says it could need up to $7.5 billion more if the economy doesn’t improve, for a total of $30 billion by 2011. Bullcrap! Let’s stop this madness now!
GM plans to start repaying the loans with $2 billion in September.
GM shares were up 15 cents, or 8 percent, to $2.01 in midday trading