General Motors officials beat a hasty retreat on comments made by Chief Financial Officer Ray Young the day after the automaker filed for bankruptcy, early this week, saying they intend to be “transparent” when it comes to the corporation’s financial results.
During a Monday news conference detailing the bankruptcy filing, GM Chief Executive Office Fritz Henderson pointedly promised to maintain a high degree of transparency, in light of the interest in the company’s promised turnaround – and the $50 billion in public funds that were being invested in that effort. But a day later, CFO Young seemed to belie that, warning that when it emerged from its Chapter 11 filing, GM would offer no more data to the public than any other privately-held company.
“As a privately held corporation,” he said, “We’ll probably not disclose (financial) information except to the shareholders,” a group that happens to include American taxpayers, who, through the U.S. Treasury Dept. will initially hold a 60% stake in the “new” GM, with the rest divided up among a union health care fund, former bondholders, and both the Canadian and Ontario governments.
Young’s comments triggered a flurry of angry criticism, much of it pointing to the fact that the public, in fact, makes up the largest group of shareholders, and thus it would be common sense, if not an outright requirement, to issue financial updates.
The automaker now says that will happen, issuing a statement that, “New GM intends to make regular disclosures during the period it is private in order to provide appropriate information regarding our financial conditions.” (more…)