Frankly, I am tired of hearing about cars!
At General Motors'
GMAC is the business on my mind. And I was a little disappointed not to hear much about plans for it. In my opinion, it is the only thing keeping General Motors afloat. And thanks to problems at the car business, GMAC is struggling to keep its head above water.
Wagoner spoke of the "hand-in-glove" relationship that GMAC has with GM Automotive that "provides ample benefits to our dealers and our stockholders." Notice which one came first. Don't get me wrong -- dealers are a very important part of the value chain. But should they come ahead of shareholders?
As we know, GMAC's credit downgrades have increased its cost of financing. Unlike General Electric
With all of the strategic alternatives being discussed, I hope this is an option under consideration: Send the automotive financing arm of GMAC to the manufacturing side and spin off the other finance businesses of GMAC (insurance, mortgages, etc.) to shareholders. Let GM Automotive compete against Ford
I know my scenario is highly unlikely because the automotive business would be at risk as a stand-alone business. At least Wagoner is taking a first step at reducing manufacturing capacity to be more in line with demand. But if more changes aren't made and certain parts of GMAC aren't given their own lifeboats soon, GM North America could pull the whole thing underwater.
Fool contributor David Meier owns shares of GE but does not own shares in any of the other companies mentioned. The Motley Fool has a disclosure policy.