FacebookTwitterGoogle+RedditEmail

The Sinking of GM

You might imagine that, even if they didn’t give a rat’s ass about their employees, the managers of General Motors would at least feel an obligation to show some solidarity with the beleaguered bondholders and shareholders of the company that they have so effectively run into the ground.

Aren’t captains supposed to go down with the ship, or at least wait until all the passengers and crew have been safely offloaded?

Apparently that ancient ethic of leader responsibility doesn’t extend to captains of industry.

Instead, with the once biggest corporation in America and perhaps the world, General Motors, now shriveled down to a point that its market capitalization (share price X number of shares outstanding) now stands at just $685 million, putting it below the average market cap of $879 million for companies in the Russell 2000 Small Cap Index, and with the stock price sinking faster than a flounder lure,  GM executives, including Vice Chairman Bob Lutz, Vice Chairman Thomas Stephens,  and Group Vice Presidents Carl-Peter Forster, Ralph Szygenda, Gary Cowger and Troy Clarke have sold their holdings on Friday and Monday. Lutz, according to company filings, sold all of his 81,360 shares of GM at a $1.61/share price for a total of $130,990.  The six top executives together sold a total of 200,000 shares.

Talk about rats fleeing a sinking ship!

Clearly these once-pompous executives were thinking of the fact that if, as seems increasingly likely, GM goes into bankruptcy, its shares would fall to zero value or close to it. But these are fabulously wealthy men, not elderly pensioners, and you’d think that they’d have been willing to eat a loss of a paltry few tens of thousands of dollars in order to stand in solidarity with the stakeholders of the company—the employees, the bondholders, and the shareholders–through its hard times. Really, after all what’s $130,999 to someone like Lutz, a former president of Chrysler (he oversaw the introduction of the Viper and Prowler there) and a vice president at Ford (where he introduced the Sierra and Explorer lines), and a guy who pulled down a cool $6.9 million in compensation from GM while the company was tanking last year?

Now that GM is smaller than the Otter Tail Corp. (a mini-conglomerate based in Fergus Falls, MN that boasts a market cap of $709 million), and about one-fifteenth the size of Starbucks,  one can understand that a man who once famously called global warming  “a crock of shit” and said hybrids “don’t make any sense,” and who in recent years was touting bigger engines as GM’s salvation, might want to walk away from it all, and not be reminded that he once ran the place, but still, the idea that he’d sell his shares at this point?

Let’s recall that the workers at GM are being asked to give up $10 billion of the $20 billion that the company owes their health care trust fund, which under the circumstances means— putting that $10 billion at total risk. Shareholders, for their part, are being asked in a proposed rescue deal, to see their collective holdings reduced to a 1% share of the company. Even bondholders are being asked to forgive $27 billion in debt in return for a 10% equity stake in the company—equity that could be reduced to nothing if the company later went into bankruptcy.

But the executives who have worked out this proposed rescue “deal” are having none of it. They’re cashing in their chips now, while there’s still something to cash.

It’s a sorry spectacle that is worth remembering the next time somebody tells you that you need to be more “businesslike,” as though that’s some kind of model behavior we should all be emulating.

DAVE LINDORFF  is a Philadelphia-based journalist and columnist. His latest book is “The Case for Impeachment” (St. Martin’s Press, 2006 and now available in paperback). He can be reached at dlindorff@mindspring.com

More articles by:

Dave Lindorff is a founding member of ThisCantBeHappening!, an online newspaper collective, and is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).

January 17, 2019
Stan Cox
That Green Growth at the Heart of the Green New Deal? It’s Malignant
David Schultz
Trump vs the Constitution: Why He Cannot Invoke the Emergencies Act to Build a Wall
Paul Cochrane
Europe’s Strategic Humanitarian Aid: Yemen vs. Syria
Tom Clifford
China: An Ancient Country, Getting Older
Greg Grandin
How Not to Build a “Great, Great Wall”
Ted Rall
Our Pointless, Very American Culture of Shame
John G. Russell
Just Another Brick in the Wall of Lies
Patrick Walker
Referendum 2020: A Green New Deal vs. Racist, Classist Climate Genocide
Kevin Zeese - Margaret Flowers
Uniting for a Green New Deal
Matt Johnson
The Wall Already Exists — In Our Hearts and Minds
Jesse Jackson
Trump’s Flailing will get More Desperate and More Dangerous
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party: Part Three
January 16, 2019
Patrick Bond
Jim Yong Kim’s Mixed Messages to the World Bank and the World
John Grant
Joe Biden, Crime Fighter from Hell
Alvaro Huerta
Brief History Notes on Mexican Immigration to the U.S.
Kenneth Surin
A Great Speaker of the UK’s House of Commons
Elizabeth Henderson
Why Sustainable Agriculture Should Support a Green New Deal
Binoy Kampmark
Trump, Bolton and the Syrian Confusion
Jeff Mackler
Trump’s Syria Exit Tweet Provokes Washington Panic
Barbara Nimri Aziz
How Long Can Nepal Blame Others for Its Woes?
Glenn Sacks
LA Teachers’ Strike: When Just One Man Says, “No”
Cesar Chelala
Violence Against Women: A Pandemic No Longer Hidden
Kim C. Domenico
To Make a Vineyard of the Curse: Fate, Fatalism and Freedom
Dave Lindorff
Criminalizing BDS Trashes Free Speech & Association
Thomas Knapp
Now More Than Ever, It’s Clear the FBI Must Go
Binoy Kampmark
Dances of Disinformation: The Partisan Politics of the Integrity Initiative
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party: Part Two
Edward Curtin
A Gentrified Little Town Goes to Pot
January 15, 2019
Patrick Cockburn
Refugees Are in the English Channel Because of Western Interventions in the Middle East
Howard Lisnoff
The Faux Political System by the Numbers
Lawrence Davidson
Amos Oz and the Real Israel
John W. Whitehead
Beware the Emergency State
John Laforge
Loudmouths against Nuclear Lawlessness
Myles Hoenig
Labor in the Age of Trump
Jeff Cohen
Mainstream Media Bias on 2020 Democratic Race Already in High Gear
Dean Baker
Will Paying for Kidneys Reduce the Transplant Wait List?
George Ochenski
Trump’s Wall and the Montana Senate’s Theater of the Absurd
Binoy Kampmark
Dances of Disinformation: the Partisan Politics of the Integrity Initiative
Glenn Sacks
On the Picket Lines: Los Angeles Teachers Go On Strike for First Time in 30 Years
Jonah Raskin
Love in a Cold War Climate
Andrew Stewart
The Green New Deal Must be Centered on African American and Indigenous Workers to Differentiate Itself From the Democratic Party
January 14, 2019
Kenn Orphan
The Tears of Justin Trudeau
Julia Stein
California Needs a 10-Year Green New Deal
Dean Baker
Declining Birth Rates: Is the US in Danger of Running Out of People?
Robert Fisk
The US Media has Lost One of Its Sanest Voices on Military Matters
FacebookTwitterGoogle+RedditEmail