Private capital companies can make decisions more interesting for a CEO. Without manipulation of a corporation the likes and size of GM their ability to dilute their risks are waning, hence the IPO offering.
GM needs to maintain its liquid capital, hedge its own risks and move forward with new technologies such as the Chevy Volt. Quite frankly, Nissan's Leaf is already looking like a better INVESTMENT than the Volt to that 'class' of purchaser. Why? Because the American consumer is making their own investments in Light Sweet Crude and it is the electric car.
Europe has problems and the American consumer cannot afford to bail them out AGAIN. If there are auto companies in Europe unable to maintain their heads above water then they need to close up shop. I am quite sure GM, Ford or Chrysler will be more than willing to open car dealerships in Europe of any product manufactured in the USA.
I would like to think of it this way. The USA is the "New Japan" when it comes to exports.
The Unions now know the way it works. Liquid asset companies, like private capital firms with names like Bain Capital, Blackstone, Carlyle approach a company newly recovered by the American people, protecting itself from problems by holding onto liquid assets, namely cash, and seek to influence that corporation to use its cash in brokering deals that will result in supposedly better stock prices and higher bonuses.
Now while that private equity firm doesn't leak 'the goods' about the deals it is brokering when the information is finally released to the public Wall Street goes to work hacking away at the profits the companies 'of the deal.' The companies, their stockholders and their CEOs will no longer make those profits and there is no investing in the companies themselves which would be reflected in their stock prices. Wall Street monopolize elements of 'the deal' and will run the cost of raw materials, etc., through the roof so any 'deal that was a dreamscape' is no more.
The companies I am exampling are Peugeot and GM. They will go forward with their plans and CONTRACTS, but, they won't see the benefits they planned for because those anticipated incomes/savings are now in the hands of draconian greed merchants that will benefit. Greed merchants like the Bain Capitals of the world.
The CEOs have to 'get over' their Old World ideas of bonuses and seek to really improve the market share for their products. In Europe, if companies like Peugeot are up against the wall because they have lousy CEOs that have no 'rescue capital' then it is too bad. If GM again slides into 'making an easy buck' idea, they will return to bankruptcy and we are off to the races again with greed merchants holding all the monies all over again.
Right now. The liquid assets GM holds are burning a hole in the pocket of it's CEO. Those liquid assets are insurance for the continued SMOOTH and sustained operation of General Motors. Those assets are OPERATING ASSETS and NOT investment assets. The future of any company is not draconian ideas of 'quick money' but Research and Development, reclaiming Market Share removed by 'second life' parts manufacturers and Marketing of products the consumer is looking for. These corporations should not be giving their products away either. They need to make a 'reasonable' profit to continue to grow their liquid assets, insure their future at least a decade out and bring consumer confidence back as a asset and not 'a risk.'
GM, Ford, Chrysler, railroad companies, bus companies need to realize their own liquid assets will empower them to become their own Bain Capitals and return their market share to THEIR PRODUCTS without the whims of greed merchants that could not care less about destroying them for their own benefits. GM should be looking at their liquid assets as a potential for the development of security for its employees providing their own Private Capital Investment.
Get the picture yet? The companies in the USA are targets for their asset of a 'government buoyancy' in the USA treasury and the need of the people to have work. It is a SYMPATHY ASSET. A sympathy asset that is real, resilient and coveted.
American corporations need to work to reclaim their stability and expand their 'cash' assets. Removing liquid assets from the 'cash flow' of Wall Street will secure the company and dilute the competitions ability to have '2nd life' companies ( I am not talking about recycling items either). The reason there are independent parts companies for autos and aircraft and shrinking market share for corporate manufacturing is because those companies siphoned off the assets of corporations to 'rebuild' their own dreamscape of wealth at any cost. These companies don't care about American labor and the quality that labor brings to the product and the market share of the very companies they depend on for their own incomes.
Example. This is only an example:
Chrysler has shut down it's part division because an independent company has been able to 'tool and dye' a plant in China, India or Iraq. The company now making those parts will not hire American labor and if it does it will be non-unionized, pay dirt cheap hourly wage, create poverty and destroy not only the market base for Chrysler's products, but the very parts they produce. It is draconian. It will insure the failure of the market place and American corporations will be in a vicious cycle of self destruction.
ie: "Boeing in South Carolina"
If people can't afford to fly and expand tourism the future of Boeing is very bleak. So why even conceive of 'The Dreamliner,' stick with government contracts.
If GM wanted to take an interest in Peugeot they should have first insured it was GUARANTEED it raw materials 'at the price' that would insure the well being of both companies. That wasn't done and now it is too late.
GM will either settle for its 7% share in Peugeot and hope it improves with an injection of cash or it will 'play the game' of 'save the CEO his job' and consolidate labor and manufacturing, hence, destroying its own market share. I strongly suggest GM 'take it on the chin' with Peugeot and the CEO absorb a bad decision as poor advise and ever elastic market pressures.
...UK industry analysts believe GM will combat (click title to entry - thank you) over-capacity in Europe by axeing two plants – possibly one in Bochum, Germany, and another in either Spain or Britain, which leaves the Cheshire factory vulnerable. "We could be at the sharp end of it," one analyst said. A closure announcement would be damaging for the Government, es-pecially as it could be made around the time of the Budget on 21 March. Amid signs that the UK may escape a double-dip recession, George Osborne, the Chancellor, will set out measures to boost growth, including a credit easing scheme to provide loans to small and medium-sized firms....
