Though some sort of controlled restructuring may be needed at GM, measures as drastic as traditional Chapter 11 bankruptcy would be unfortunate for creditors taking partial losses or not getting paid at all, says Bridgewater CEO Hall. “I think there would be more unemployment, suppliers would be hurt, there would be more people going out of business, and I think it would frighten the public. It would hurt sales, which we all need,” Hall says.
St. Clair Shores, Michigan-based Prestige Automotive Group (No.1 on the B.E. Auto Dealers list with $828 million in revenues) owns GM, Ford, and Mercedes-Benz dealerships.
Wagoner’s ouster is more symbolic than likely to produce a functional impact on GM operations, says Prestige CEO Gregory Jackson. While he gives Wagoner credit for building minority ownership of General Motors auto dealerships, he says, “I think Rick did what he had to do relative to the minority program because it was good business for GM. If you ask most of us who are not trying to be politically correct, there’s still so much more to be done.”
Jackson’s reaction to the President’s astonishing move to force a corporation to change its chief executive is, “I think Obama is demonstrating bold leadership. The understanding is that from where America sits, America owns General Motors. That’s the reality, because of the amount of money put on the table. America has given GM more money than GM’s total capitalization. Essentially America owns GM, and President Obama is the CEO of America. These are bold times, and they require people who are not faint of heart.”
Bankruptcy for GM or Chrysler has always been in play and has been discussed for the past year, says Jackson.
“I think it would hurt us, because anytime you consider a company in bankruptcy, there are going to be some buyers that run scared away from the product,” says Jackson, who doesn’t know whether the long-term effect of an automaker’s bankruptcy would be good or bad. “What I’m more concerned about is the particular peril that so many minority dealers are in and the fact that there doesn’t seem to be enough help out there for those people.”
“There is a lot of lobbying going on by NAMAD [National Association of Minority Auto Dealers] and the other associations, and we’ve spoken on Capitol Hill a couple of times, but no one has really reached down and said, ‘Hey, we are going to make sure we don’t lose all these gains that we’ve made over the years and lose a whole group of minority business people,’ ‘” Jackson adds. “America needs minority businesses to be thriving for this country to truly live out the promises it has made to all people.