Did General Motors CEO Rick Wagoner admit Tuesday that bankruptcy was an option? In an article titled GM's Chief Softens View on Bankruptcy, the Wall Street Journal suggested that he did, albeit in a "subtle but significant" way. But an official GM blog post accuses the WSJ of, if not quite lying, than seriously bending the truth.
According to the blog post, the article originally appeared in print under the more decisive headline "GM's Chief Shifts Posture on Surviving Bankruptcy."
The WSJ's angle was based on remarks that Wagoner made at a media breakfast on Tuesday. The article's argument that Wagoner has "softened his view" came from one brief statement that bankruptcy "could work but it might not work."
The GM blog cites the entire segment of Wagoner's speech. Looking over the transcript, it's clear that Wagoner was talking about a special "pre-pack" bankruptcy that is supposed to take only 30 to 60 days. "And what I have learned is that it could work," he said. "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."
Comments to the blog post barely touched on the WSJ's angle. Instead, readers questioned GM's business practices, mistakes, and union problems, and the arguable merits of bankruptcy.
"In my opinion," writes Gerry, "a pre-pack Chapter 11 filing is GM's best chance at a re-org. If it doesn't work, then, as was the case with Daewoo, somebody can come in and buy what is worth buying, the creditors can get paid whatever results, and the UAW can go stand in the bread line, and possibly get a job with whatever company picks up the pieces, at wage and benefit levels that the business can support."
Image: Clutch assemblies at a General Motors plant. Copyright 2005, The Associated Press
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