GM Bankruptcy Never Discussed, Says Lutz

Detroit Free Press:

"Bankruptcy for GM certainly is not an option," Lutz said Monday morning while speaking to the Public Relations Society of America. "The board has never talked about it."

GM is burning through immense amounts of cash and has suffered this year as automotive industry sales have declined.

"It's not something that we consider would be constructive or would solve any problems for anyone," Lutz said.

Through the first half of the year, GM burned through $1.05 billion a month in cash, and analysts have raised concerns about whether or not the company can make it through 2009. To deal with that situation GM is looking for every possible way to raise money.

Read the whole story: Detroit Free Press

Comments

[rpahk]

If Bush refuses to endorse a bailout/loan, no sweat for him as the Dems would inherit the fallout. Watch for Bush to do as much damage as possible between now and January 20 to help the Republicans in 2012.

[seereene1]

As I watch GM and other American car companies flounder I keep wondering. Whatever happened to the good old supply and demand concept driving industry? I haven't had a GM car in 20 years primarily because they don't hold up well over time. I also had no use for big luxury trucks or SUVs. If and when GM gets with the program and develops a truly fuel efficient vehicle or vehicle that runs on alternative energy sources they will continue to fail. As they should. I live in western Mass next to a town call Westfield that is called 'Whip City.' Their primary industry was manufacturing buggy whips. It is now a sleepy town devoid of industry. Keep bailing out companies manufacturing 'whips' and our economy is doomed to fail.

[rpahk]

Two of the top 10 selling vehicles in the US are Chevys: Malibu and Impala (NY Times was the source). Chapter 11 would enable GM to reorganize by selling non-performing brands (Hummer, Saab) and to consolidate the remaining brands (dump Buick and Pontiac).

[beaupritchard]

My thoughts are Obama should enact programs to protect the american worker if the automobile industry fails but do nothing to keep them from failing. Let them taste a little of their own medicine ... same with AIG and anyone else who put globalization ahead of their loyalty to workers who built these corporations.

I remember when these corporation were just companies ... americans with an idea. The incorporation of companies with the emphasis on investors killed whatever ties and what ever loyalties companies had to workers or country.

Having made that choice ... what do they want from me.

[iambusto]

corporations exist solely for the benefit of investors (the owners). if you are against the idea, maybe petition the govt. to prevent companies of the future to stay private and not be able to access capital markets.

[beaupritchard]

I know you say this tongue in cheek ... but given the "too big to fail" claim by AIG and now GM ... limiting the size of a corporation isn't a bad idea.

[KillTheMessenger]

A corporation is simply a specific legal form of a company. All corporations are also companies.

http://en.wikipedia.org/wiki/Company

http://en.wikipedia.org/wiki/Corporation

The difference between a corporation and a partnership, association etc. is mostly that the corporation is a legally different entity than its owners and that the corporation and its owners do not share some of the liabilities they would share if they had been incorporated as a partnership.

This also has serious tax consequences, but those are probably secondary to your argument.

A corporation does not have to be any less friendly to its employees than a partnership or a sole proprietorship. Or any more, either. It really depends only on the management's style of business. HP (the old HP, the part that is now Agilent) for decades was one of the most loyal companies and their employees knew why they were there and not somewhere else. As far as I know Analog Devices and IBM still offer enormous personal benefits and freedoms to their fellows and Google was said to have had tons of perks, at least until very recently. You could be working for a lot worse places and most likely you do.

[beaupritchard]

"A corporation is simply a specific legal form of a company" ... Here is a better definition for you ... Corporated (and incorporated) are legal definitions of a type of company. Corporations have stock. Other types of companies are LLC's, and sole proprietorship, which define legal liablities and ownership. These don't have stock.

I know what a corporation is ... the difference I am pointing out is between those business entities that are beholding to stockholders and those family owned business entities who aren't.

Really incorporating starts the down ward spiral of the quality of goods and services. Equity is in the name ... thus wendy's a once family owned business now uses cheaper meat ... customers go thinking they're are getting the same quality ... stockholders get a bigger check.

Very few companies resist the temptation of a chunk of change dangled out in front of them by corporation ... mostly because second some times third generation owners don't have the same pride in the name that built the company.

Hershey chocolates being a notable exception todate ... but when/if it does I guarantee the bar of chocolate won't be the same.

[beaupritchard]

BTW ... work for myself ... Do a lot of work for HP ... Boeing ... EDS ... and yes even Google has a piece of me in it's software somewhere.

[beaupritchard]

I will say this ... some of your post are intriguing

I will chalk the "You could be working for a lot worse places and most likely you do" comment up to ignorance.

[seedyrum]

The world still watches

ITS weird that GM wants tax payers dollars to avoid bankruptcy>>>Did GM pay its corporate taxes?? Did the executives pay their taxes or put their money in offshore accounts to a taxes>>

Taxpayers money is collected from citizens who pay their taxes>>

Its funny how execs compare USA corporate taxes to emerging markets or smaller countries> They dont compare standard of living the population or even how we are first to be industrialized when some of these countries were trying to build industries>>

If USA doesnt collect taxes from its citizens where does these companies think the money they want to borrow comes from>>How will the deficit get paid??

McCain said "country first" so he would have cut taxes> If he was able to have done that how would the investment banks been able to borrow to shore themselves up??

I DONT LIKE TAXES>> However i realize taxes are a necessary evil for roads schools street cleanup police and other emergency services UNLESS WE ARE GOING TO DO EACH ONE OURSELVES>>

The world still watches

[beaupritchard]

"The american worker is going to have to retrain learn to do something else" ... remember that ... well now automakers are hurting ... they want our help ... shouldn't our response be "too bad learn to do something else".

Not a dime to automakers ... not a dime.

[seedyrum]

The world still watches

GM as well as other American companies lost their way> Arrogance and avarice caused their problem>> Over thirty years ago GM had a wake up call on gasoline but they didnt heed the wake up call> Japanese built better cars with better quality and fuel efficiency>>

When things are going well why shouldnt employees share in the profits as the execs were?? If employees have to give up something will the execs give up some of their exorbitant salaries pensions golden parachutes or bonuses and their health care benefits??

If the government gives a bailout GM board has to go as well as the CEO>>New management

As a country we are in this fix because of arrogance greed and fraud>>As if we were the only game in the world>

The world still watches

[motley2]

What is Obama proposing to extract from GM in exchange for a taste of the $700 bailout buffet?

[mrcontinental]

Deutche Bank just rate you boys ZERO. Bankruptcy is most definitely on the table.

[iambusto]

Deutche bank is VERY HARSH on GM.

I would go with Barclays Capital. Their price target on GM is 1$. I kid you not :)

[mrcontinental]

They are trying their best to bait us. I grabbed some Ford when it was $1.51 and dumped it at $2.91. I would grab some GM for a $1.00 and dump it at $2.00. It's like playing the slots at Vegas right now.

[PacificGatePost]

ONLY VERY DRASTIC ACTION WILL SAVE DETROIT

CONGRESS: Here’s a radical plan that will put air in the industry sails…

http://pacificgatepost.blogspot.com/2008/11/solution-for-detroit-gm-friends.html

It’s this, or bankruptcy. The American Auto industry should be saved but under new conditions.

[trollsbwild]

Why should a discussion of chapter eleven take place? We ALL know they will get a bailout. They are too big to fail. The cascading effect of job loss is an unacceptable option.
However, there should be fines and punitive measures handed out to incompetent and/or corrupt business practices. Won't hold my breath waiting for this to happen.

[000Jade000]

If they get bailed out and then merge with Chrsyler, does that mean they will be able to reap windfall profits like the bailed out banks are?

[mrcontinental]

Yep

[DAE]

If we had a socialized health care system and if pension benefits were guaranteed by the govt (which they are supposed to be but really aren't) the unions wouldn't be bankrupting the auto companies. So don't blame the unions. Its our lack of a national industrial policy that brought us to this impasse. The corporate elites are only out to line their own pockets and want short term gains, so no long-term growth strategies are implemented. So much for short-sighted laissez-faire market oriented capitalism. The auto companies need stock-holders, consumer groups, environmentalists, unions and other stakeholders represented on their boards of directors to frame industrial growth strategies and set production standards and goals.

[iambusto]

GM needs to go into chapter 11 and eliminate unions like yesterday. !!

[mrcontinental]

If the unions go GM will not sell another vehicle in this country because NO one will be able to afford them. The only reason everyone isn't making minimum wage right now is because of unions.

[KillTheMessenger]

Bankruptcy is not something you discuss in board meetings. It's something that happens to companies that have management like Mr. Lutz.

[ErnestineBass]

100% in agreement on that, KTM.

[iPolitics]

Corporate WELFARE.