Uninspiring Language From the “New General Motors”

by Richard H. Frank

The time lag in finalizing and publishing the quarterly report for the “New General Motors” is somewhat frustrating for those of us interested in monitoring the financial progress of this ailing automotive giant.  As I have written in the past, my hope is that this once proud and profitable corporation returns to its position as a leader in our free market enterprise system.  However, I fear the sporadic reports of their profitability seem all premature.

On July 7, 2010, General Motors issued a Press Release, part of which I quote, “…expected, anticipated, possible, potential, target, believe, commit, intend, continue, may, would, could, should, project, projected, positioned'”  are all “words intended to identify forward-looking statements that represent our current judgment about possible future events.” Each and every term above is a modifier and intended to provide an excuse for not meeting some reasonable expectation for performance.

After a career spanning 48 years in the automotive industry, both domestic and internationally, my experience is that any management team using the aforementioned language to forecast future performance would have been fired on the spot.  These terms remind me more of the political rhetoric and doublespeak we hear coming out of Washington, D.C.  Where are the definitive statements based on market share, product innovation and productivity from which reasonable forecasts with some foundation in fact may be generated?

If the management in charge of the “New General Motors” has adopted methodology used by the CBO and Washington bureaucrats, I fear for the long-term survival of the corporation.  My assumptions, however, are based on solid business models for profitability and sustained growth.  If, however, the corporation follows the VW model in Germany, the taxpayer will assure its ultimate survival through unending infusion of cash.

Therefore, I await the latest quarter’s report on profitability in hopes that I may set my fears aside for this once great corporation and hope for the day it may return to being a publically traded entity with the total exit of all and any Government equity.

I pray that my fears are unfounded.