Word: tasks
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...list presented to GM by the President's auto task force is stark and steep: shrink labor costs, including retiree health-care expenses; slash debt; kill or sell low-performing brands; and reduce the number of models for sale and the number of dealers selling them. Should GM, the United Auto Workers (UAW) and the company's bondholders fail to figure out how to execute those tasks by June 1, the government will usher GM into bankruptcy, which could lead to its breakup into "good" and "bad" subsidiaries. The bad would be sold for parts...
...that sense, GM is getting off easy: Obama's task force gave Chrysler just 30 days to seal its proposed partnership with Italy's Fiat Group - or else join the likes of American Motors, Packard and Studebaker in the auto graveyard. If Chrysler gets the deal done, the government will lend it $6 billion to sustain its operations. But Chrysler's owner, Cerberus Capital Management, will leave with zero of its $7.4 billion original investment. (See the 12 most important cars of all time...
...Even worse, in the eyes of Obama's task force, is that GM was immodest in its assumptions. For instance, GM had forecast a market-share loss of 0.3% per year until 2014. The task force noted that GM has been losing market share at a rate of 0.7% per year for the past 30 years - and GM was planning to drop brands and nameplates. The task force had no reason to think that GM could gain share, and its sales rate proved that point. Industry-wide, March auto sales were down 40% on a seasonally adjusted basis...
...Over the course of the past three months, he has come to believe that the bondholders, who have thus far balked at taking GM stock for much of their debt, made a bad investment and should lose all their money, says one person familiar with the President's auto task force. Rattner also took the point in ousting GM chief Rick Wagoner over the weekend. Bloom, for his part, has taken day-to-day leadership in talks between Chrysler and Italian automaker Fiat. His union bona fides have made him the point man with the United Auto Workers union...
...will no doubt be relieved that Obama's new strategy is as pragmatic as it is. The new President has abandoned earlier plans to turn Afghanistan into what Defense Secretary Robert Gates called "a Central Asian Valhalla", the task is focused on basic stability: halting the Taliban's momentum and preventing the country being used as a base for terrorists. In The Hague, U.S. Secretary of State Hillary Clinton even talked of negotiations with reconcilable Taliban insurgents, promising "reintegration into a peaceful society if they are willing to abandon violence, break with al-Qaeda, and support the constitution...