GM — The Clock Is Ticking
Not Business As Usual
The GM Board of Directors will meet on September 8 – 9, 2009 and this certainly appears to not be the same old “ribber stamp” from the Board. The Wall Street Journal had a very significant article about ChairmanEdward E. Whitacre, Jr and his no-nonsense approach to the basic business of GM.
Sell Cars, Keep Market Share, Make A Profit
The basic business of GM, in the simplest of terms, includes selling cars, keeping and increasing market share, and making a profit. These are the most basic of business issues. For the past 30 years, GM has has been a failure on all points, a fact that has been addressed in the Tribune.
Boardroom Direction
Serving on a Board of Directors affords the Director an opportunity to participate in strategic decision making for the Company. If the Company runs into a wall or loses direction the Board has responsibility. If the Board is apathetic or follows directions from the Company Management then the Board has given up control. This terrible condition has been in place at GM for so long that the Board became a “rubber stamp” for Company Management. This terrible condition of Boardroom Apathy has permitted GM to crash. Jerry York served, arguably as a dissident Board Member, on the GM Board and made a notable presentation at the Society of Automotive Analysts’ 18th annual Automotive Outlook Conferencein Detroit on January 10, 2006. This transcript provides an intuitive insight into the domestic and international manufacturers.
Tough Talk From Mr. Whitacre
The WSJ reported that Whitacrewas going to push GM and the Board. One particular statement is paramount today. ‘”He’s said to us that ‘you’ve been given a clean balance sheet, now apply the same focus to market share and sales,” said one person familiar with Mr. Whitacre’s views.’
Boardroom Deadlines
GM plans to have a public offering to sell stock in about 12 months to pay back part of the $50 billion the US Government has given it. For this to successfully happen there must be a successful business plan must be implemented immediately.
Public Relations Are Paramount
Above all GM must have a PR campaign that communicates the strengths of the Company that was in bankruptcy for 40 days. Financial analysis in addition to the common investor will look at the GM stock offering very carefully. If GM is to be successful then they must put a positive spin on what is going on, in addition to getting people to buy their current product line.
Action Now
GM must get the car business right and they must do it now. The seriousness of what is happening now cannot be underestimated.
