GM is Dead; Long Live GM

You read it predicted here when GM's officers denied it. General Motors, whose entry into bankruptcy became too hard even for spokespeople to deny, now has a plan to exit bankruptcy.

Over the objections of some creditors, General Motors -- now renamed Motors Liquidation Co. -- will sell all its assets to an entity called "General Motors Co." This new General Motors Co. will be controlled by the U.S. government, which hopes to have an IPO in 2010.

I ask you: who in their right mind will buy shares of a U.S.-based automotive company whose predecessor hasn't made money in years and which is largely owned by the same union whose personnel practices prevented it from adopting quality control systems that long ago made its overseas competitors more capable and more efficient?

The fact that the U.S.-controlled buyer is doubtless capitalized with taxpayer money makes me wonder why we didn't do the bankruptcy last year, before "loaning" GM all those billions it promptly burned. The U.S. could have created a buyer and just not bothered to invite other owners, leaving creditors to fight over sales proceeds. At least the taxpayers could have gotten a fair price for their new muddy pig.

In its new incarnation, GM might be fairly light on debt, but unless it fundamentally changes the way it accomplishes objectives to bring it in line with post-Second-World-War management theory, there's little reason to believe GM will perform any better than it has in recent years.

GM is dead. Long live GM! (So long as our politicians can keep writing checks off our account.)