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Let GM Hit Bottom: Ackman
by Christopher Glynn ,Senior Reporter, November 12, 2008

Forget about a government bailout—General Motors Corp. would be better off going bankrupt, according to William Ackman.

During a discussion about the automaker on Charlie Rose Tuesday, Ackman said a “prepackaged bankruptcy” was the best move to get its struggling business back on track.

“The word ‘bankruptcy’ is scary for people, but it is simply a system,” Ackman, head of Pershing Square Capital Mangement, said.

Ackman, 42, noted he is not a stakeholder in GM.

GM is asking the government for aid after claiming it did not have enough cash to operate for the remainder of 2008. Company Chief Executive Officer Rick Wagoner has said a bankruptcy filing would be “a disaster far beyond GM and a sad chapter in American history.”

The government put a $700 billion bailout package in motion to help Wall Street. A similar package aimed at the auto industry has been proposed and is gaining popular sentiment on Capitol Hill.

GM is trading at $2.92 a share. It has lost 90% of its value in the past year.

New York hedge fund Pershing Square is considered an activist shareholder and has in the past invested in McDonald’s, Wendy’s International and retailer Target.

Post a comment.

POSTED BY Christopher Glynn at 11/12/2008 10:36:39 AM

William Ackman your a dumb ass! If Gm will get rid of Wagoner, that alone will make GM stocks go up.If GM files bankruptcy then they might as well shut there doors for good! A good CEO will pull out of this mess.

POSTED BY Douglas at 11/12/2008 10:51:57 AM

We all know that the auto industry has brought a lot of there trouble on thereselves but America can not stand by and let the American Auto Industry collapse,the banking industry is bad enough but just think of the millions of job loses their will be if the auto industry collapses. You have just began to see defalts on mortgages if that happens.The American Auto Industry has always been there to help others in need now it is time to return the favor. I do beleive that means new Management at the top who have been paid millions of dollars to drive these companies in the ground

POSTED BY Rick at 11/12/2008 10:57:24 AM

The UAW caused this disaster in the first place. Forcing the Auto Industry to pay workers 158,000 in money and perks, a year is criminal. Before Taxpayers foot the bill the UAW should be made to face reality and scale back workers pay and perks or watch them lose their jobs.

POSTED BY MS at 11/12/2008 11:03:28 AM

NO vulture would want to pick off any assets of GM except the headquarter building.. the manufacturing centers all over would be a waste of assets that cannot be converted to other uses... Nobody else will want to buiild cars because they need to sell ink cartridges to make up for the losses in hardware like HP . Ooops, I am talking about computers not cars, duh?

POSTED BY Gumby at 11/12/2008 11:18:25 AM

Mr.Ackman Are you that dumb the auto industry puts more people in jobs than any other industry.Have they made good dicisions in the past, no, but today the industry has great Amerian cars due to come our way. I also beleive some of the top management should be people who really have a love for their job not just the big bucks.How can we look at any industry leader make the big bucks and watch the business go down and still keep their job. We need to put incentives in place for our top dogs get paid on proforance. GM grades salespeople on how we treat our client after selling them for year crap they built for years to keep them in business. Now they build a great car, and they think we should kiss them for what they should have done years ago. As a taxpayer I feel we should loan them the they need, but pay top people on performance not title.

POSTED BY Les Laufer at 11/12/2008 12:09:10 PM

The problem with government bailouts, buyouts and otherwise interference is not a left-right, free market-socialist ideological problem. It's an oversite problem. There's nothing wrong with taxpayers investing in an industry that's 'needed' or 'essential', but if the government doesn't drive hard bargains and then monitor the situation to make sure the 'investment' is yielding the promised returns, the whole effort's a boondoggle. If the government feels it must invest (and it really shouldn't...why prop up a proven loser like GM, Chrysler, Ford) then it must have the right people in place to hold the companies' feet to the fire and make 'em dance to a new tune. But, this has yet to ever happen in the U.S. Canada and Europe have figured out how to do it, but somehow the US hasn't mastered it yet. Paulson got away with corporate murder, and now every other mismanaged sector wants Uncle Sucker to be their sugar daddy bailout buddy. Workers, communities etc. get nothing, but shareholders who took excessive risks and corporate boards so talentless that they couldn't make money running a brothel in a gold rush somehow get their losses reduced, wiped out, or use the bailout money for future acquisitions. Feel cheated, America? You should.

POSTED BY Chrishna at 11/13/2008 9:43:34 AM

I tend to agree with William Ackman. I am an independant electrical controls designer and will be out of work next week. Why should GM get bailed out? I have not heard of any bail out plans for me or millins of other self employed people who are struggling in this tough economic time. Is there any bail out plans for self employed people that I have not heard about?

POSTED BY Tom Geborek at 11/15/2008 1:14:08 PM

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