[Mr. Wyndham]

Lord knows we've had a dicussion on this topic a billion times over, but on the off-chance that someone caught the Wall Street Journal's article today on bankuptcy and GM, I felt this needed to be seen....

The silver lining here, imo...is that GM's really starting to defend itself and "slap back" when they get "slapped" unjustly...These are the fireworks I've been wanting to watch for years, now.

Never Let the Facts Get in the Way of a Good Story

Hang out for long with a group of journalists, and someone will, half jokingly, repeat that newsroom nugget. Like many jokes, it reveals an uncomfortable truth. Sometimes the facts simply don’t support the story the reporter wants to write or the editor wants to put on the front page.

In my past life as a journalist and magazine editor, I wrestled with this almost every day. The choices editors make when faced with this dilemma are revealing — they are what separate serious journalism from the tabloids.

Unfortunately, The Wall Street Journal, once a bastion of business journalism, seems to be wrestling unsuccessfully with this dilemma, at least where GM is concerned. In headline after headline, story after story, the front pages of the paper have promoted bankruptcy as a solution for GM. The story on page B1 of today’s paper, headlined “GM’s Chief Shifts Posture on Surviving Bankruptcy,” is yet one more distortion of GM’s position on this critical issue. (An online version with a slightly revised headline can be read here.)


The story came from a Q&A session with Rick Wagoner, GM chairman and CEO, at a March 17 media breakfast hosted by the Christian Science Monitor. In response to a question about bankruptcy, Wagoner responded (and I quote):

• “A lot of people who write about bankruptcy, I don’t think have ever been in bankruptcy. And what I have learned after studying it in detail is that it brings significant risk on, and puts things out of the control of the board and management, and into the control of other parties.

• 
  “You talk about a fast “pre-pack” that could work in 30 or 60 days. And what I have learned is that it could work. And it might not work. And if it doesn’t, it could mean, in the end, a long period of bankruptcy which, I believe, would result in the liquidation of the company.
  
  “Because all of our research, by the way, continues to support the view that consumers will shy away from buying vehicles from companies in bankruptcy.
  
  “We can accomplish 99 percent outside of court that we would inside of court. Why in the world wouldn’t we do it outside of court, save the risk, and by the way, at a much lower expense from the standpoint of support? Because if we have to file Chapter 11, there is no DIP (debtor in possession) financing other than the U.S. government, and that would be a huge, potentially huge amount of financing required.
  
  “So I think it makes sense from everybody’s perspective to do this outside of court. We have to show that we can do that. I think we can. I think it is in everybody’s interest, including the bond holders and VEBA and others, to do that. But it’s not done yet.”

Journal reporters at the breakfast heard these very words, which I transcribed verbatim from a digital audio file of the event.

What Wagoner said is completely consistent with the detailed Bankruptcy Analysis in Appendix L of our February 17 viability plan. We understand the arguments made by proponents of bankruptcy reorganization. We have hired outside experts to assess all the options. And we have concluded that an out-of-court restructuring is less risky for GM stakeholders, less expensive for the U.S. taxpayers, and reduces the very real potential of GM death-spiraling into liquidation, dragging down the U.S. economy with it.

Did The Wall Street Journal ignore what Wagoner really said so it could write the headline and story it wanted?

I’ll leave it to you to decide.

http://fastlane.gmblogs.com/