Monday, March 02, 2009

GM's Wagoner Too Optimistic

G. Richard Wagoner, Chairman and Chief Execitive of General Motors (GM-$2.01), said the auto maker’s cost cuts will make it profitable in a U.S. car market of 11.5 million to 12 million cars, about 1 million fewer vehicles than the company said it needed in December before it cut more jobs. If all goes according to plan, GM could return to profitability within 24 months, added Wagoner: "Supporting GM's viability is a sound investment for U.S. taxpayers and one that will be paid back.” – but are GM's sales expectations realistic enough to bring the struggling automaker back to profitability?

Against all odds in a sighted world, Helen Keller said: “Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.” Albeit one cannot fault Wagoner for embracing hope and confidence, me thinks he is brimming with too much optimism.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

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