• May 12, 2009
As General Motors teeters on the brink of bankruptcy, several major executives have just taken advantage of an opportunity to sell their stock shares just after the company's quarterly earnings report came out in May. Among them, Bob Lutz, Troy Clarke, Thomas Stephens and several others decided that it was better to cash out and get something, no matter how paltry.
As the June 1 deadline for a workable restructuring plan or bankruptcy filing looms, the suits grabbed what may be their last chance to get rid of their holdings. Departing Vice Chairman Lutz took in $130,989.60 from the sale of his 81,360 shares. GM North America President Troy Clarke sold 21,380 shares for a return of $31,001 – not exactly a ringing vote of confidence in the automaker, but you'd expect so many thousands of shares would bring more money. Ouch.

CEO Fritz Henderson keeps intimating that bankruptcy is where General Motors is headed, and the stock has taken a 90+ percent beating this past year, making all financial activities look like preparation for a bankruptcy filing. Or just an example of rearranging deck chairs on the Titanic. Thanks for the tips, everyone.



[Source: Bloomberg]



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    • 1 Second Ago
  • 29 Comments
      • 5 Years Ago
      Point of interest:

      1. GM's non-bankruptcy plan includes a new common share issue that would dilute the existing shareholders to $0.08 per share.

      2. GM's alternative (i.e. chapter 11); would result in the current share value dropping to $0.00 per share.

      The fact that Lutz et al managed to get more than $0.08 per share is simply a credit to the stupidity of traders on the NYSE.
      • 5 Years Ago
      To dump all of those shares and only get $30,000: Why would you even bother with it?
        • 5 Years Ago
        That's an excellent question.
      • 5 Years Ago
      "I personally think the shareholders should file a massive lawsuit."

      If you were foolish enough to still be holding GM stock you get what you deserve. I saw the writing on the wall several years ago and sold mine at $65/share.
        • 5 Years Ago
        Ditto, sold off my shares long ago. didn't make $65 a piece, but i did a hell of a lot better than $1.60.
      • 5 Years Ago
      And for the record, these, to quote audi-arena, "tools" are the ones that got that company into this mess to begin with. They took an iconic American company and drove it right down to the ground, and just when they thought they couldn't do anymore damage, they dug it in some more. I don't pity these guys one bit. Remember while people are struggling to put food on their tables because of these men's bad decisions, these "tools" are going home to the mansion and eating hearty meals.
        • 5 Years Ago
        you know what they say Alex, if it happens on your watch, it is your problem. You seem like a bright guy so I am sure you didn't take my comment as me saying it's all their fault. But when they were doing "quite well" in the SUV and truck boom days, they didn't do anything to fix their company long term. Did they think they were going to go on forever selling ridiculous amounts of hummers to soccer moms and athletes? The job of a CEO of any company, is to lead their company through good and bad times and to give their company a vision for the short and long term. Unfortunately, Bob Putz didn't do either. And for the record, the market share that GM lost during his watch was unprecedented for any corporation of that size.
        • 5 Years Ago
        Ohh spare me. GM has been on a downward trajectory for DECADES! The American auto industry as a whole has been losing market share since the 80s. Lutz et al certainly didn't help the situation beyond the short term (GM did do quite well in the SUV boom) but to point the finger at them and say they are the single source of the problem is ridiculous.

        GM is far too large a company with far too many serious issues to be dragged down to this level by a single group. Its problems are and have been: market share, build quality, brand perception, union demands, legacy costs, self-competing brands, the list goes on.
      • 5 Years Ago
      He did it for the lutz.
      • 5 Years Ago
      At first I thought "Insider trading!" but then I thought, "If this is insider trading it's the worst case ever." Insider trading would have applied if they had dumped it BEFORE it plummeted to basically nothing. They are just doing what everyone else is doing right now. You don't need inside knowledge to know bankruptcy is coming to the RenCen.

      And yes I know they haven't made the best choices over the years, but the ones you should blame are those BEFORE Lutz who churned out year after year of sub-par vehicles. They are the ones who created a culture of mediocrity and fed the public's view of GM as a low quality brand. Can you honestly look at the cars Lutz is responsible for and say he drove them into the ground? The Malibu, CTS, etc, are good cars. People just aren't buying cars period and the companies in the worst financial shape are suffering the most.
        • 5 Years Ago
        That is what I was saying right??
        • 5 Years Ago
        So I guess Mr. Lutz was responsible for the Vega, Olds Diesel, all the crapy "X" cars (Citation Phoenix etc...) , the Caddy 8 6 4 and all those other fine GM vehicles of the past? He was one of the few people there that was trying to get away from the crapy cars they built in the past!
        • 5 Years Ago
        Sorry Nelly, I'm with you all the way. I was just adding to you're post.
      • 5 Years Ago
      If they had sold *before* the earnings report came out, that would a problem. This is not. I don't blame them; I'd get out, too. After the government gets done screwing the bondholders, the stock won't be worth sh1t.
      • 5 Years Ago
      Talk about a pay cut!

      The shares Lutz sold at 61 cents would have been worth about $3.5 million only 19 months ago. Tuesday's close was at $1.09. The future is pretty bleak for common share holders that could end up with as little as 17 cents a share following a restructuring (if they get anything at all).
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