The government will not be running GM in anything like the sense you suggest. Unless the folks on the Fed’s Auto Task Force are lying or deluded, (A possibility I suppose I must concede) the government will for the most part be a silent partner. Decisions about which vehicles to produce and how will be made by day to day management, not the US government. And the cycle time on development of new vehicles–even if they are cobbled together from existing models, a not unheard of practice in the car business–is so long–at a bare minimum two years, that the government people will be long gone because: a) GM will have had at least some success, or b) GM will have been liquidated in continued failure. GM is doing now what Ford wisely did several years ago: bring in a new CEO from outside the industry to change the culture and the processes. Mullally came from Boeing and knew nada about the car business but relative to the other US manufacturers, Ford is doing quite well. Whitacre from AT&T can do the same thing with GM.

The bankruptcy allows GM to shed debt and dealers from which it can never recover, and though it certainly is not public policy I’d like to see in an ideal world. It’s far better than a Chapter 7 liquidation of the company. But if GM could not shed that debt and other obligations–sadly many of them to their workers and retirees–it could produce the best, most desirable cars in the world tomorrow and it would make no difference.

Yogi also said, “When you get to a fork in the road, take it.” This says something about the choice the government was facing. All bad choices, indeed, but this is the least bad of them all.

Anyway, it’s fun to talk politics and business, and I hope you’re well and happy.

**
I wrote back to Bill that I hoped he was right, but that I was quite doubtful. Let’s hope Bill is correct on this.

So $83,000,000,000 is what New GM would have to be worth in order for us to break even on our investment.
But $56,000,000,000 is what GM was worth at its all time peak in 2000.

And it’s only worth about $7,300,000,000 now.

jl