Monday, November 29, 2010

Fool us once, shame on you. But twice? Say it aint so.

The Globe and Mail today observes that "accounting issues raise big red flag over reborn GM".

How "reborn" can it be if it's carrying over accounting issues from before its collapse? (discussed, for example, here and here).
Sadly, having previously observed other practices that hearken to their shifty ways, there remains enough bad habits to make any investor pause before trusting GM. 

I've got to ask, having seen them burn through over $60 billion dollars en route to one of the biggest failures in corporate history, and now seeing bad habits resurfacing, why should tax payers be putting ourselves in a position to get burned again?

Try and appreciate the scope of this absurdity. Once upon a time, GM was the single largest corporation in the known universe. It would have had more resources and more obligation to be the standard for counting corporate money than any other going concern. Somehow, in the twilight of its former existence, it somehow forgot how to count money properly.

Now, having emerged from bankruptcy a new company, one might expect that getting off to a good start would include counting and reporting the beans properly. Evidently, that's a poor expectation when it comes to this brood.

Funny how "little people" who juggle family and work must, with the little energy left over at the end of a day, still be responsible for managing their finances properly; yet companies with millions of dollars available to pay the salaries of entire departments of people with post-graduate degrees in finance and accounting, who spend eight full-time hours each day, five days each week, still can't get it right - and then on top of that, have the audacity to announce "hey world, we're ready to honor your trust again" when, very clearly, they are not ready.

This is absolutely, utterly unacceptable. Our government should divest itself today and let the chips fall where they may - this is a free market, right? Either way, it seems painfully clear that we will inevitably be left holding the bag.

I hope I'm wrong, but indications at this stage are not promising.

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