GM...GOOD BYE..

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Republican Party like Newt Gingrich commercial -- cars. Waiter with the head of Ku Klux Klan caller we get this is blown this camp but the -- just approach for -- this and -- time for pharaoh and his moral among General Motors is apparently preparing the following Chrysler's footsteps by filing for chapter eleven bankruptcy protection breaking your goals and 6172666. Years of experience.

I want people to want to spy cam caught I want to -- a hot -- weekend.

Nobody but General Motors. Offers so many deals on so many 1986 cars. Or so many people living -- is nobody's got a -- would want -- they've come back with stronger network. I didn't do my fellow homeowners --

Always movement drove in from her room and told Feinberg. Ferrero is full.

Good morning it is WRKO. And Tom and -- coming -- from the new balance. World headquarters. As Tom puts on his hand cream. We are prepared to face up to the huge story of General Motors going under and being resurrected with fifty billion dollars of our money. This a couple of reasons why it is a good moment to propitious moment to talk to Steve's site. The paper for which works to Boston Globe the headline it's an interesting headline that doesn't say GM to file for bankruptcy. Obama makes his big move. Yes on GM and the sub headline says auto maker will seek bankruptcy protection today and what what's your observation is removed and the president is going to lay out his turnaround scenario how do you react to that headline why do you highlight that this is absurd. To highlight Obama. No not to highlight Obama and the notion that somehow or other. The president is going to lay out his turnaround scenario it's not a businessmen never has been a businessman when you expressed you off. Incredulity. That he was even elected to the office of the presidency this is even more incredulous because at least he's been in politics for a number years. Hello Nicholas politically things can happen in the dead horse. Are he's never run anything before but -- he's running the country. And he's been doing it now for five months the country still here knowing a soul going the other guys don't like bring on Steve's heart from a hello Landon see what he has to say about the nature. Of this bailout plan and what's gonna happen -- 50 1000000000 dollars good morning Steve.

Thank you write what you get fired from -- You don't. -- no we did not say. That was speculation pop pop pop pop pop. The -- a lot of vacancies. That's -- that steel Paul Bedard that's the first thing the puck into sun's behind as a matter. That in. A.

Hey what's going on here with General Motors and what should we look to six months twelve months down the road Steve.

Well first of all the clock is -- its seventh and right now on my computer which means it's fifty minutes. Oh wait for filing this bank. Have you sold your stock yet.

Way out but and that's going to happen in New York and and not by the way. Well this is going out amazingly quite was going to pop out the other end in bankruptcy court this week as well. But that's a different story -- right now at this plan is will be filed today everybody's seen this coming it's been telegraphed in Obama is. Sending emissaries out across the country just sell this plan and it it is going to be impossible to escape it today.

60%. Ownership on the part of the federal government 12% by the Canadian government and the unions have and a big chunk themselves.

They do -- there is investors who own about 27 billion dollars worth of unsecured debt and they get 10%.

All right so predict the future force --

I would say the next six months certainly is going to be a -- I think one of the one other -- you can say well here you know we did this on paper and everything seems to work but you know we saw that a little bit with the banks where. All of a sudden the government. Either owns something -- an important financial interest in it and believes that they can run everything and have their own interests. Placed first and I think that there's going to be enormous pressure. To do all kinds of different things with General Motors. On political purposes to whether that means. Keeping a plant open and somebody's Stater doing something different art dealing with the dealerships in different ways I think that's. That's kind of going to be a disaster I think the good news in this plan so far as it does accomplish a lot of financial things that are. Give it GM of big leg up that it doesn't have today would you you mentioned. The debtor in possession financing that. You and I are gonna extend to general -- that thirty billion dollars. The Canadians are up for another nine spots billion dollars and then as I've said this 27 billion dollars in debt it's gonna. Go away because dental is that the plans approved. Will forget that -- the stock to that's that's a turnaround of something in this 67 billion dollar. Range which is a big difference in the mean time. They're gonna close a lot of facilities they're gonna close eleven and an account idle three more of them and I don't know long term what's going to happen with them. And there's going to be a big dealership closing element which is going to make this Chrysler dealership closing that we talked about last week look like chump change. And that's going to be and other political hot potato but that's and so there's going to be a whole lot going on and and finally. -- retiree health care. Elements of this which has been a big. Trunk of both the GM and the crisis story they're going to end up financing about half of that with. -- GM's stock so. -- financially they're a lot of good things going on here. That couldn't probably happen in an organized way. In in in terms of going into bankruptcy in just kind of collapsing into it's of those --

Steve on the dealership issue that you mention analysis there's some similar controversies and decisions on the Chrysler deal. On the dealership issue explain to us what what what the purpose is he in my sense is that the dealerships. Well established local businesses lots of employment. And the best possible distribution network for the GM product why don't want to drive to a dealership that might be. Thirty miles away when I always had a good response of 15 miles away.

Yeah well I'm not sure that you -- a lot of cars and in a lot of the ones that were closed fill it ultimately they're in and I am not an expert on. Car dealerships in the distribution of cars through them but I think there are a lot of efficiency issues some of them and I know. -- what we talked about crisis always lots of people say hey you know I was doing fine and I was going lots of cars and you know there was nothing wrong with this that wasn't broken why you know you're doing away with that. But he clearly both Chrysler and GM's cases that debuted these sprawling dealerships. As. I highly inefficient way for them to distribute cards that they couldn't maintain anymore and whether you know they caught the right number two many are not enough I don't know.

It's going to be a very interest in transition I don't hold out a lot of hope for the company despite the huge amounts of money that were funneling into it. You know it's it's it takes that to take GM which. Their cars there are kind of borderline to begin with in terms of their appeal to the old market place but now with the president pushing new fuel efficient. Vehicles and try ended they're going to have to be on the cutting edge of new technology. And have all these other issues all worked out really fast to be able to compete with the imports.

Right what you read an interesting issue that you know the Obama has this other issue about fuel efficiency that is pushing very aggressively. Into 26 -- and it you know that sort of works against GM specifically -- that. If you look at all that the vehicle that GM selling that there's a lot of a large percentage of the overall. Unit sales that. Don't work very well and to fuel efficiency whether it's big trucks serve big fat -- cadillacs or. Different things like that so that the fuel efficiency issues. Definitely works against GM more so than other car companies right now and that's. That's another thorny issue at the moment it went when he's talking when you. Lower the costs in ways -- we're talking about getting rated debt giving them cash. Closing plants you know. Government is saying net. Before that GM plant -- A car market which -- sixteen million cars being sold in the US. A year for them to break even and we all know that there's nothing like. Sixteen million party you're being sold right now they say that under this new plan that if you have a markets selling ten million cars. That that they can break even on the ten million numbers and we're sort of in that area right now this is clearly a very depressed times. Ten million as a whole long term -- but you know I'd bet that that's a good back to a weather turns out to be true.

I don't understand factoid GM can breakeven in a marketplace that's shrunk by 40% or whatever is every side. But but that what would their market share B I mean they're -- they don't know what their market shares candidates aren't they sent.

Today they claim that they can have a smaller marketshare than it that they currently have and still do that but it you know what. More really means I don't know it mean if we're going to this GM could apple radically smaller market -- two or three years. For all we know it it's it's very hard to imagine that. -- in a confusing time a government directed. A car company is going to produce. Popular. And attractive vehicles for a very competitive marketplace -- it. You know who won it one of the biggest problems facing all these companies aside from the fact that. You know they had been booming financial market problems for years that they. You know sort of dealt with at the edges and didn't he didn't really solve all along is that there's a around the world of best over capacity to produce cards. And it's very hard to salvage a troubled business. When you have a global marketplace that can produce many many many more cars than we can buy and that's not going to change for years used to come.

will take some calls on this sire thank you we appreciate your help. 617266. Exceeds six CC Boston Globe every day Steve's here I do not know.