Lutz says bankruptcy not in the cards for GM
In a press briefing at the North American International Auto Show today, GM's outspoken vice chairman Bob Lutz flatly stated, "There is no plan for GM to become bankrupt."
Lutz's denial of bankruptcy plans came on the heels of similar statements by CEO Rick Wagoner on Sunday, and were reinforced by Goldman Sachs analyst Robert Barry today.
GM's stock responded nicely to the positive news (or maybe it was the Camaro concept) to end the day up nearly 8 percent.
Lutz, always good for a quote, recalled his experiences at the other members of the Big Three, saying, "You talk about near bankruptcy. I've seen bankruptcy situations. And this ain't one of them."
Regardless of the optimism at the top, GM's supertanker will take a long time to make the turn to growth and profitability. 2006 will be tough.
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Reader Comments (Page 1 of 1)
Jonathan 6:51PM (1/09/2006)
"There is no plan for GM to become bankrupt."
As a general rule, most companies don't plan on bankruptcy. It tends to happen when a company's losses outweigh its profits for a long time, you know! Maybe they ought to tell Bob Lutz this.
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Lee Gibson 7:31PM (1/09/2006)
I'm sure there was also no plan to get into these dire financial straits to begin with.
Bob uses many words to say nothing.
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Trevor 7:44PM (1/09/2006)
Diddn't GM report an average $2600 loss per car a while ago?
Where in all hades is GM getting money, their mortgage department or their Italian fish buisness??
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Ian 7:54PM (1/09/2006)
GM could legitimately call a Chapter II, NOW (the corporate equivalent of bankruptcy) showing their cash drain Versus cash in hand and probably be able to convince a bankruptcy judge of the need to "restructure" GM. i.e. such a legal move would effectively "invalidate" prior Union pay, health and futurre retirement schemes. This would be one way for GM to equalise their business with the US branches of Honda, Toyota, Hyundai, Mercedes and BMW.
However, as 2 of the most important execs have said this will NOT happen one has to believe such a legal
move" is not on the cards.
All said Ford and GM have show their hands of future models and they certainly are grabbing more interest than usual.
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jrhmobile 9:45PM (1/09/2006)
The only "unplanned" bankruptcies happen when creditors FORCE a business into Chapter 7 liquidation.
Every business that files for bankrupty plans to execute it on its own terms ... though it generally doesn't share those plans before it executes them.
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Mack 2:47AM (1/10/2006)
GM is not going to go bankrupt. They have too many good cars. They just have bad advertising.
A few hybrid conversions to some of the already outstanding line of vehicles, add a bit of Toyota advertising and whamo!
GM has more than it has shown.
The recent commercials featuring the big ol SUV leave
me a bit amazed.
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Joe A 9:29AM (1/10/2006)
If GM could put that concept car into production then they will not have to worry about Bankruptcy.
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