GM CEO Rick Wagoner to Step Down Immediately

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Originally Posted by bananaz

Wow, if true thwer are a lot of issues to be dealt with. There are so many parts used on multiple platforms. Who owns tooling, etc? While there are good points to a split up, development costs of powerplants, etc. will now be amortized over fewer vehicles and more costly. How will it impact the dealer network?

Why would the CEO quit now unless it is forced on him and he is diametrically opposed to it? Brand identity seems nebulous at GM so it may be good there.
Certainly better for Sirius if it happens. Now, can we get the Gov't to break up MLB into two entities so we can renegotiate that contract? ;)

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Bananaz...

My first job was at a Cadillac dealer and I worked in the parts department. We sold parts for all GM makes and models.

What I learned is that most of the cars along the GM line are EXACTLY the same car, but they have different emblems. The pontiac firebird and chevy camaro were the same car. The Monte Carlo was the same as the Buick Regal, one of the pontiacs and one of the oldsmobiles....cutlass! as well. Heck, They even had a pontiac j2000, which was also a cadillac cimarron and a chevy cavalier.

The only difference was the appearance package. They even used the same paint.

I failed to mention GMC. The truck lines will be untouched. GMC will continue and Chevy will also continue to sell trucks. Too much profit from those.

The same goes for Chryler. Look for those to be broken into Chrysler, Jeep and Dodge

Any slowdown in GM installs = beneficial near-term cash flow for XM.

While GM subs were very helpful in padding sub numbers and near-term revenue, they were a major drag on expenses for XM. That is because GM subs take nearly 3 years before they are profitable for XM.

If there is a slowdown in GM installations -- it will have a near term effect of slowing subscribers and drop in revenue growth -- however it will have a more noticeable effect in lower expenses... as GM subs cost more to add, than the revenue they brought in.

Near-term positive as it is beneficial to cashflow and profitability; long-term negative, as it takes away from longer term revenue figures.



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I don't think that anyone can say that Rick Wagoner was ever going to be viewed as a solution for the future if for no other reason than long history of being a part of what's been wrong with Detroit in the past... No doubt that his leaving is part of an agreement for continued government support to reshape this industry... The announcement Friday not getting it done with bondholders / creditors, requiring more time made this announcement an inevitable outcome... Now what is anyone's guess, but restructuring of the business model and renegotiation of contracts with XM and Sirius would also seem to be inevitable...

My opinion is all this uncertainty in the OEM delivery system is what is already affecting SP and keeping SXM's business model in question by would-be investors... So any pull back here is just another opportunity to add shares for believers like myself...IMHO.

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Originally Posted by cos1000

I don't think that anyone can say that Rick Wagoner was ever going to be viewed as a solution for the future if for no other reason than long history of being a part of what's been wrong with Detroit in the past... No doubt that his leaving is part of an agreement for continued government support to reshape this industry... The announcement Friday not getting it done with bondholders / creditors, requiring more time made this announcement an inevitable outcome... Now what is anyone's guess, but restructuring of the business model and renegotiation of contracts with XM and Sirius would also seem to be inevitable...

My opinion is all this uncertainty in the OEM delivery system is what is already affecting SP and keeping SXM's business model in question by would-be investors... So any pull back here is just another opportunity to add shares for believers like myself...IMHO.

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Although I agree in principal, none of this SHOULD affect Sirius at all. Not that it won't, because it will, although it shouldn't. Following me?

When Sirius XM were separate, these issues would have been huge. As things are now, it doesn't matter who falls by the wayside. Satellite radio is in every car line. The autos that GM and Chrysler lose to consumers will be snatched up by Ford (brilliant of Ford to go it alone here), and we still get the subscriber in the end.

The american consumer will buy approx 10 million cars this year whether they be from Ford or Toyota. Hyundai is at 100%. I for one hope they do extremely well with their buyback promotion.

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Originally Posted by Brandon Matthews

Although I agree in principal, none of this SHOULD affect Sirius at all. Not that it won't, because it will, although it shouldn't. Following me?

When Sirius XM were separate, these issues would have been huge. As things are now, it doesn't matter who falls by the wayside. Satellite radio is in every car line. The autos that GM and Chrysler lose to consumers will be snatched up by Ford (brilliant of Ford to go it alone here), and we still get the subscriber in the end.

The american consumer will buy approx 10 million cars this year whether they be from Ford or Toyota. Hyundai is at 100%. I for one hope they do extremely well with their buyback promotion.

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Yeah I agree that with the merger, competition for subs at any cost is over, and now its a matter of efficiently adding subs ro maximize FCF, as Homer985 points out above.. I see this as a means to a quicker end to the OEM uncertainty that I feel is a weight on the current SP. Sooner this gets resolved, the sooner the business model can prove it's efficiency in attaining those FCF goals.... I see this as a net positive and if their is a pull back in the SP, which I would not anticipate being more than .02 cents from this, then it is an opportunity to add if your looking for one. This stock as you know pulls back out of confusion more than substance.....

Restructuring HAH!!!! That is why we have chapter 11, not taxpayer money!!!

Unneccessary comment removed

I guess Rick Wagoner is kind of a scapegoat, but a needed one for the Obama Administration and maybe even the UAW.
There was a huge union-demonstration in Frankfurt over the weekend to support a bailout for Opel and Vauxhall and according to the media a long video conference between Merkel and Obama about that matter. There was also massiv criticism the way Wagoner handled this and even GM-Europe turned their back. Probably not very important , but maybe the last drop into the bucket.

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Originally Posted by brandon matthews

i can't see how this is good news. I just cannot see rick stepping down if the plan tomorrow is beneficial to gm shareholders. No matter what, gm cannot afford this at this time. It certainly won't help sales in the near term.

Unless of course, the only way to save the company was that he was blackmailed into stepping down. Thoughts?

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The United States of America ceased to exist as a free democratic republic today, March 29, 2009. When the President can essentially fire the ceo of a publicly traded company, the form of government has changed to Socialism. I don't care if you think this guy was any good or not. It was up to the board of directors and the shareholders of the company to decide. Not the President of the United Socialist States of America. This is a sad, sad, sad day in our once great nations history. Those are my thoughts.

That's an absurd comment King. You're forgetting one very important point.
GM is a bankrupt company and the only way they can survive is with Govt/tax payer's money. So doesnt it follow from there that the Govt has the right and responsibility to protect the tax payer's investment by firing the CEO who was in charge during the time they lost 82(?) BILLION dollars and went bankrupt.