RUSH: Darien, Connecticut, this is Bob. Great to have you on the EIB Network, sir. Hello.
CALLER: Thank you, sir. It’s an honor to speak with you.
RUSH: Thank you very much.
CALLER: I don’t know if you saw it but another GM, an executive announced that they were going to, quote, step down as CEO today. As someone who follows the industry closely, the timing and the news was a big surprise, and I think it’s related to Whitacre’s comments back on August 5th calling General Motors Government Motors.
RUSH: You think so?
CALLER: I know so.
RUSH: You think that he’s being — ’cause the stories I have seen, in fact, it’s an interesting one. One of the stories reporting Whitacre leaving makes mention of the fact that the government had nothing to do with it, that it was the GM board making the decision. Now, obviously you have to say that because some people are thinking the government did force the move. Here’s the guy on the verge of the Volt, the savior of the company, Obama’s car, and they’re showing a profit today, they’re reporting a profit of one-point-whatever billion dollars, and the CEO says, ‘I’m outta here’?
CALLER: That’s right. And they’re right on the verge of filing their S-1 to go public.
RUSH: Yeah?
CALLER: And when they go public, the last thing you want to do is show that you have uncertainty at the top. The timing of his stepping down is just shocking.
RUSH: So you believe that Whitacre was forced out because he, in public, referred to the company as Obama Motors?
CALLER: That’s what people close to the industry believe, yes.
RUSH: He was joking, though, when he said it.
CALLER: I think what he was referring to is he felt there was a negative connotation and it was hurting their sales, which it probably has to some extent. He was speaking the truth.
RUSH: Oh. Oh, oh, oh, yeah, now it’s coming back to me. It’s all coming back to me now.
CALLER: And that was just at an industry conference that he made those comments.
RUSH: That’s right, that’s right, it was in the context of, ‘Yeah, Obama Motors is hurting our –‘ yeah. Yeah, yeah, yeah. I do remember. He was not making a joke about it. He was addressing the fact that that’s what people think, perception, image, and so forth, how it might be harmful.
CALLER: And they wanted to get the government out of the ownership stake of General Motors because he felt they had a better chance of succeeding going forward.
RUSH: Right. Hence the purpose of the IPO.
CALLER: Right. And those comments made by Mr. Whitacre were at the same time that Obama was out in Detroit —
RUSH: Right.
CALLER: — you know, parading around —
RUSH: Exactly right. And don’t forget that Obama did fire Wagoner.
CALLER: And Fritz Henderson.
RUSH: That’s right. The third CEO of Obama Motors bites the dust. Interesting. And it is curious right on the front of going public. Thanks for the call, Bob.
Be right back after this, folks. Don’t vanish.
BREAK TRANSCRIPT
RUSH: Now, by the way, our previous caller, Bob, may have a point. Here’s what Whitacre said just a couple days before August 7th: ‘We don’t like this label ‘Obama Motors.’ We don’t like this label of government ownership. People in GM are embarrassed by that. You lose your reputation. It’s hard to get it back.’ So Whitacre did say that. So he said it’s embarrassing to be known as Obama Motors or government-owned, because it means the loss of their reputation, and now he’s gone. Hee-hee-hee-hee-hee-hee. Ed Whitacre flies the coop from Government Motors.
BREAK TRANSCRIPT
RUSH: Our last caller, Bob was talking about Ed Whitacre, gone from General Motors, Obama Motors. He didn’t tell us how, but the guy’s connected in the auto business. It was very clear he was connected. Insiders are saying that Whitacre — and this is on the eve of GM going IPO, going back public — Whitacre was probably forced out. This is what the industry thinks anyway, that Whitacre was forced out because of this. Around August 7th, he said: ‘We don’t like this label of government ownership.’ He said it at the Center for Automotive Research annual industry conference. He said, ‘We don’t like this label of government ownership. People in General Motors are embarrassed by that. You lose your reputation. It’s hard to get back.’ Whitacre is also on record as saying that GM needed to have several very positive quarters of growth before they would offer an IPO, which they’ve not had, yet they’re talking about offering the IPO. That might be one of the reasons.
But we’ve been told here from somebody high up in the industry the scuttlebutt is that Whitacre’s gone because — you know, it still is Government Motors. I mean even in the story that announces his resignation or his leaving or whatever it’s being called, the AP, whoever, makes a point, ‘This was a board decision, the government had nothing to say about this.’ Really? People must have been thinking it. Why have to point that out? I mean nobody had even made the charge yet, and here they are denying it. (interruption) What, do you think the governor called me un-American again? Governor Granholm called me un-American for calling the Volt a lemon, which I didn’t do. The New York Times did and I was simply quoting them. Now, the big news is that General Motors, what is it, $1.3 billion profit, is that what it is, or million? Which is it? Billion-dollar profit.
Well, Jeff Bennett, Wall Street Journal today: ‘The consolidation of new-car dealerships in the U.S. continued in the first half of the year, although there are signs the worst may now be over. The dealership count fell to 18,223 after 258 showrooms shut their doors,’ in the first half of the year. ‘The decrease comes after a record 1,603 dealerships closed last year in the aftermath of the General Motors Co. and Chrysler Group LLC bankruptcies. … GM has 5,114 dealers, down from 6,049 at the start of its bankruptcy. The reduction includes steps GM took to shrink its network during bankruptcy and closings caused by other factors such as the economy.’ So it might well be that the contributing part to the profit is the closing of dealerships, and we have heard recently that that was a political move taken not by General Motors but rather by the government.