DRAWING on OBSERVATIONS

Ball point pen on today’s newsprint

In the wake of the earthquake and subsequent disasters in Japan, GM quickly identified 118 parts made by Japanese manufacturers it needed to keep up with production. And while many auto makers were harmed by the tragedy, GM’s CEO predicts no material impact to it’s earnings.

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Ball point pen on this mornings newsprint.

Ron Bloom will become the Obama administration’s top auto adviser. Bloom attended Harvard Business School, spent ten years at investment banks as is known for his negotiating skills.The position is being vacated by Steve Rattner, who is leaving under a cloud of suspicion for his alleged involvement in NYS pension kickbacks.

Ball point pen on the morning newsprint

The Obama administration moved towards the inevitable this morning. One hundred year old company and number one auto maker in the world for 77 years in a row, will file for bankruptcy at 8:00 am this morning. All the bailout money in the world could not fix it’s broken business model.
Let’s hope he’s not the same as the old boss.

Ball point pen on the morning newsprint

Yesterday, auditors from the Deloitte & Touche accounting firm reported that despite the $13.5 billion GM received in bailout money “recurring losses from operations, stockholders’ deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern,”
GM has lost $82 billion in the past three years including $30.9 billion last year. The company’s stock closed yesterday at $1.86 per share. Yet despite all that abysmal news, the audit revealed Rick Wagner’s pay package for 2008 was worth $14.9 million.

Yesterday the dow closed at 6,594. How can investors feel confident in the market with these modern day Neros in charge?

Did we really need Deloitte & Touche to tell us that GM’s business model was broken? Even a guy who draws pictures could see the writing on the wall. Some past doodles of Rick.

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Ball point pen on the morning newsprint

G. Richard (Rick) Wagoner Jr. has been the CEO of General Motors since May 1, 2003 when GM stock price was 35.50 per share. This year GM isn’t performing very well, Saturn sales -19%, Buick sales -21%, Saab sales -29%, SUV sales -37%. …at yesterdays close $10.24.