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February 18, 2008
GM Loses $38 Billion:
What would you say if your company lost $38 billion last year, setting
an all-time record for losses in your industry?
How about, “We’re pleased”?
Welcome to the auto industry, and by all means, look on the bright side.
I have a $20 bill in my pocket that GM hasn’t lost yet. So you see? It
could be worse.
fairness to GM, a lot of this loss was an accounting technicality –
owing to unused tax credits I guess they’ve decided not to use. Because
when you’re losing money hand over foot, why bother using your tax
Remember the “Seinfeld” episode where Kramer explains to Jerry that it
doesn’t bother corporations when they lose money, because they just
write it off? He admits he has no idea what that means, and from the
looks of things, he may be running GM.
Actually, Chairman and CEO Rick Wagoner is running GM, and here is a
statement he made to accompany the pleasing news: “We're pleased with
the positive improvement trend in our automotive results, especially
given the challenging conditions in important markets like the U.S. and
Germany, but we have more work to do to achieve acceptable profitability
and positive cash flow.”
matter how much public companies and their executives like to put on a
happy face, I’m not sure a statement from your CEO containing the word
“pleased” is quite the tonic for your credibility when you just lost
They did announce that they are offering an employee buyout plan, which
prompts the question: Aren’t they always doing that? They have
some employees making $28 an hour, and if they can just pay these people
to stop working for them, they think they can hire some new employees
for half that much – which means they’re admitting they negotiated labor
deals to pay twice the market value of their workers.
These are true geniuses. If you gave me all of GM’s money and a shovel,
and told me to start shoveling the money into a hole as fast as I could,
I don’t think I could lose as much money as these guys do.
People do give you points for honesty, though. If I were writing
Wagoner’s statement, it would have sounded a little different. Let’s see
. . .
Well, today I’m here to
announce that we lost $38.7 billion last year.
Wow. Are we a horrible
company or what? And me – I must be the worst CEO in the history of
There is some good
news, though. This should get us into the Guinness Book of World
Records. You know all those people who stand around in France kissing
strangers to try to get in there? At least we don’t have to do that. I
mean, a lot of those women have armpit hair. That’s just gross.
Anyway, you probably
want to know what we’re going to do about this. I haven’t the foggiest
idea. I had this statement prepared to talk about how we anticipate
really good results in two or three years. But seriously, I’m sure I
said something just like that two or three years ago, and now look. We
lost $38 billion. So why make myself look stupid again? We’ll probably
lose even more next year, and more still the year after that.
Right now we’re trying
to pay people to stop working here. Now you might wonder, how will that
help? Why pay people not to work? Because, sillies, every time we sell a
car, we lose money. So if they don’t make any cars, we won’t lose as
I’m going to start with
myself. I make a lot, but look at the result of all my decisions. So
starting now, I’m going to stop running the company. I’ll still take my
salary of course – a guy’s gotta eat – but I’m done making decisions. I
suck at it. From now on, everyone can just do whatever they want. What’s
the worst that can happen? We lose $1 trillion? At some point you reach
the stage where you just sit there clipping your toenails and figuring
it’s ceased to matter how much you’re losing.
Maybe that’s why Howard
Hughes ended up so weird. What was I talking about?
That’s what I would say. You may be calling the insane asylum right
about now to see if they’ll take me, but they’re booked up. They just
gave the last spot to the guy who told Wagoner to say he is “pleased.”
© 2008 North Star
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