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).

Weekend Edition
March 16, 2018
Friday - Sunday
Michael Uhl
The Tip of the Iceberg: My Lai Fifty Years On
Bruce E. Levine
School Shootings: Who to Listen to Instead of Mainstream Shrinks
Mel Goodman
Caveat Emptor: MSNBC and CNN Use CIA Apologists for False Commentary
Paul Street
The Obama Presidency Gets Some Early High Historiography
Kathy Deacon
Me, My Parents and Red Scares Long Gone
Jeffrey St. Clair
Roaming Charges: Rexless Abandon
Andrew Levine
Good Enemies Are Hard To Find: Therefore Worry
Jim Kavanagh
What to Expect From a Trump / Kim Summit
Ron Jacobs
Trump and His Tariffs
Joshua Frank
Drenched in Crude: It’s an Oil Free For All, But That’s Not a New Thing
Gary Leupp
What If There Was No Collusion?
Matthew Stevenson
Why Vietnam Still Matters: Bernard Fall Dies on the Street Without Joy
Robert Fantina
Bad to Worse: Tillerson, Pompeo and Haspel
Brian Cloughley
Be Prepared, Iran, Because They Want to Destroy You
Richard Moser
What is Organizing?
Scott McLarty
Working Americans Need Independent Politics
Rohullah Naderi
American Gun Violence From an Afghan Perspective
Sharmini Peries - Michael Hudson
Why Trump’s Tariff Travesty Will Not Re-Industrialize the US
Ted Rall
Democrats Should Run on Impeachment
Robert Fisk
Will We Ever See Al Jazeera’s Investigation Into the Israel Lobby?
Kristine Mattis
Superunknown: Scientific Integrity Within the Academic and Media Industrial Complexes
John W. Whitehead
Say No to “Hardening” the Schools with Zero Tolerance Policies and Gun-Toting Cops
Edward Hunt
UN: US Attack On Syrian Civilians Violated International Law
Barbara Nimri Aziz
Iraq Outside History
Wilfred Burchett
Vietnam Will Win: The Long Hard Road
Victor Grossman
Germany: New Faces, Old Policies
Medea Benjamin - Nicolas J. S. Davies
The Iraq Death Toll 15 Years After the US Invasion
Binoy Kampmark
Amazon’s Initiative: Digital Assistants, Home Surveillance and Data
Chuck Collins
Business Leaders Agree: Inequality Hurts The Bottom Line
Jill Richardson
What We Talk About When We Talk About “Free Trade”
Eric Lerner – Jay Arena
A Spark to a Wider Fire: Movement Against Immigrant Detention in New Jersey
Negin Owliaei
Teachers Deserve a Raise: Here’s How to Fund It
Kollibri terre Sonnenblume
What to Do at the End of the World? Interview with Climate Crisis Activist, Kevin Hester
Kevin Proescholdt
Secretary of Interior Ryan Zinke Attacks America’s Wilderness
Franklin Lamb
Syrian War Crimes Tribunals Around the Corner
Beth Porter
Clean Energy is Calling. Will Your Phone Company Answer?
George Ochenski
Zinke on the Hot Seat Again and Again
Lance Olsen
Somebody’s Going to Extremes
Robert Koehler
Breaking the Ice
Pepe Escobar
The Myth of a Neo-Imperial China
Graham Peebles
Time for Political Change and Unity in Ethiopia
Terry Simons
10 American Myths “Refutiated”*
Thomas Knapp
Some Questions from the Edge of Immortality
Louis Proyect
The 2018 Socially Relevant Film Festival
David Yearsley
Keaton’s “The General” and the Pernicious Myths of the Heroic South