Thursday, January 7, 2010

A prediction so bold it landed on the front page of the WSJ!

GM predicts a profitable year in 2010.

Now that IS bold! The company, clawing its way out of bankruptcy. The economy, still shedding jobs by the tens of thousands each month (down from the hundreds of thousands shed in a few months ago - leading many to predict the beginning of the jobless recovery.)

And a prediction unprecedented in optimism.

The Wall Street Journal characterized GM's statement as a "bold and surprising forecast," and noted the company has not seen a profitable year since 2004.

The WSJ also noted that "significant hurdles remain to repairing GM's bottom line, namely winning back tens of thousands of customers and improving the profitability of vehicles sold."

And the newspaper gives us another curious statement:

"When GM started piling up billions of dollars in losses in 2005, Rick Wagoner, its CEO at the time, stopped offering financial guidance."

Does this mean the CEO shut down from stress? Failed to steer the ship back to profit? Threw up his hands in despair as the Titanic sank?

Oh well. He's set for HIS retirement, having received a $10 million package upon his hasty departure a year ago. Nothing like the golden parachute to let those inhabiting the C-suite know that no matter how badly they screw up (they can even "stop offering financial guidance" all together in a time of catastrophe), they STILL get a fat golden parachute when they're shoved out the door.

All this seems a far cry from the Randian paradise GM once inhabited, back when the Beach Boys included GM brands in their catchy, summery songs, the Big 3 ruled the roads, CEOs earned their salary and the thought of a company surviving thanks only to a government bailout was a capitalist's worst nightmare...

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