GOP official off base with GM remarks

By TOM WALSH

DETROIT — As if we needed more proof that America’s politics are poisoned beyond belief, now we have Michael Steele, chairman of the Republican National Committee, pouncing gleefully upon news of General Motors Co.’s $1.2-billion third-quarter loss, in a harebrained attempt to score political points.

GM’s loss was “further proof that President Obama’s economic experiments are wrong for America,” he said.

“Sadly,” he added, “GM has not only failed to turn a profit since the president poured 50 billion of the taxpayers’ dollars into GM’s bankruptcy restructuring, but it has actually lost $1.2 billion.”

Let’s explore Steele’s logic.

First, when the third quarter of 2009 began July 1, GM was immersed in Chapter 11 bankruptcy, from which it emerged July 10.

Perhaps in Steele’s foggy fantasyland of pre-Obama economics, all bankrupt companies became wildly profitable within days of exiting bankruptcy. But in the real world, that’s rare.

And then there’s his teeny omission in suggesting that it was the misguided “president” — singular — who poured $50 billion of your tax money and mine into GM.

Two presidents, of course, acted to keep GM alive, with the first $13.4 billion coming from the guy who was neither Obama nor a Democrat.

The point, party politics aside, is that Steele was all wet with his premise that GM’s third-quarter financial report was horrible news.

First numbers

OK, so “it’s still a loss and we cannot be satisfied with it,” as Fritz Henderson, GM’s president and CEO stated upfront Monday. What, then, is the best way to judge the first numbers from a company just exiting bankruptcy?

Profits and losses? GM lost $1.15 billion from July 10 to Sept. 30, a small fraction of the $14.5-billion egg it laid in the second quarter and less than half the $2.5-billion loss in 2008’s third quarter.

Cash flow? GM was $3.3-billion cash-flow positive in its first post-bankruptcy period. In last year’s third quarter, it burned through $6.9 billion.

Sales? At $28 billion worldwide, they were up 21 percent from the second quarter and 25 percent from the first. So much for the fear that nobody would buy cars from a bankrupt automaker.

Actual numbers

Perhaps the best basis on which to judge GM at this early stage of its reincarnation is to compare its actual numbers with the projections from its last viability plan filed May 31 in court.

GM’s third-quarter loss of $1.15 billion was is 73 percent smaller than the $4.2 billion predicted in its viability plan. Its sales and market share were higher, both at home and abroad.

Listen, I’m as jaded as the next guy after 25 years of hearing pie-eyed, rosy forecasts from GM.

But let’s not be prematurely dancing on the grave of this company, or wishing for the possible loss of its 209,000 jobs, just to take juvenile jabs at one’s political opponents.

X Distributed by McClatchy-Tribune Information Services.