So, I wake up this morning and hear on the radio that Fiat...

[TreasonousBastard]

is trying to get Opel from GM in addition to the Chrysler deal. Wow! From the world's largest manufacturing company to being hit on by Fiat-- how embarassing is this?

Fiat? From being the largest European car company, they were flat on their asses not too long ago and could have been eaten by Volkswagen. Now they're buying Chrsyler and a key brand from GM?

Blame seems to be the order of the day, and I put it squarely on Wall Street and the insistance on quarterly profits to keep the stock price high. GM was making bundles of money on trucks and SUVs before the auto crash, and throwing/wasting a few billion designing new small cars that wouldn't be as profitable, or profitable at all, just wasn't allowed. This has happened too many times-- keep squeezing profits out of a dying line and hold back on investment or you'll see your stock nosedive into the basement and you'll be bled dry. Every executive is mindful of what his or her companies breakup value is, and knows who's waiting in the wings to strike. (And remembers what a great job Carl Icahn did with TWA)

This financial model of increasing quarterly profits isn't new. I put up with it in my department in the 80's, and we were slow to catch up with the rest of the world. I even remember one week when the market capitalization of Avon was higher than that of Ford (now it might be higher than GM) because Avon had "growth potential" and met profit estimates, while Ford was stodgy and had all those factories nobody wanted.

[OHdem10]

1. This "Increasing Quarterly Profits" practice is believed by many to

havwe seriously contributed to the Corruption, ie , Enron right
on up to pressent.

Companies under pressure to increase quarterly profits have fudged the
reports because a lack of increase leads to negaive consequences for
the company. Ratings slashed.

If there is ever any reform in the system--this practice and Ratings
Companies surely need some serious changes.