August 12, 2010

AP Revises Reporting on Government Pressure to Rush GM’s Planned IPO; Why?

APheartsGM081210Unplanned but necessary “improvements,” or induced corrections? I’ll report; readers can decide.

My early afternoon post at my home blog dealt with Government/General Motors’ profitability and CEO Ed Whitacre’s “coincidental” step-down from his CEO position. That post originally noted two things that seemed problematic in the Associated Press’s reporting about the company’s plans for an initial public offering this year (the IPO is problematic thanks to Obamanomics, but that’s not the topic here).

In the  AP’s original report (since revised, which is why it’s saved here at my web host for future reference, fair use and discussion purposes), reporters Tom Krisher and Dee-Ann Durbin, with assistance from Dan Strumpf, reported the following two items in supposedly relaying the results of a discussions with “Scott Sweet, senior managing partner of IPO Boutique in Tampa, Florida, which advises investors on IPOs,” Whitacre, and unnamed government officials (bold is mine):

Several recent IPOs have been postponed because of concerns that they won’t get a high enough share price, he said. He also said the Obama administration is pressuring GM to sell prematurely to influence the November congressional elections. Last week, Whitacre said the elections are not being considered, and the government has repeatedly said GM is in charge of the sale timing.

My original reactions to the two items in my original post were as follows:

  • (to the assertion about government pressure to sell prematurely) “The AP’s quoted expert also dropped a bombshell — apparently without qualification — that may not survive future AP revisions.”
  • (to the possibly contradictory assertions about who’s controlling the IPO’s timing) “(Whitacre) saying that GM ‘is in charge of the sale timing’ is NOT the same as saying ‘we’re not trying to influence the timing.’”

Amazingly, the 4:51 p.m report by the same three reporters, with additional help from Ken Thomas (also saved at my web host, for the same reasons as above), revised — perhaps more accurate terms might be “cleaned up” or “covered the tracks of” — the wire service’s earlier report thusly:

Sweet said the Obama administration may be pressuring GM to sell prematurely to influence the November congressional elections and make the government’s controversial investment look smart. Whitacre and the government have both said GM is in charge of the timing of the IPO.

So Sweet went from an unqualified affirmative assertion concerning government interference to a “maybe.” Oh, and now GM and the government are magically saying the same thing about who’s in charge of the IPO’s timing, even though it seems that they weren’t before. As legendary Yankee broadcaster Mel Allen might have said, “How ’bout that!” Or, given the last name of the statement-changing subject matter expert involved, it might be the late Jackie Gleason’s “How Sweet it is!”

I’ll leave it to readers to decide whether AP’s version 1 or version 2 is more accurate, and whether version 2 might have been influenced by yours truly’s critique of version 1.

If it’s the latter, I would like to formally welcome the AP reporters involved to the self-correcting (or is it track-covering?) mechanism known as the blogosphere. Say hi to Tom Curley & Co. for me, will ya? And while you’re at it, ask him how his war against bloggers, search engines, and the online world in general is going.

If it’s the former, readers and commenters are free to speculate on what instigated the changes.

Geez, I didn’t even cross-post my initial effort at NewsBusters. But this one has been.

Cross-posted at NewsBusters.org.

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1 Comment

  1. Tom, what did you think of the reported GM numbers? I remembered reading your posts at Newsbusters about how GM “repaid” their loans, and there were some facts in the recent AP article I found interesting, and possibly questionable:

    For instance, GM reported that profits were up substantially, but I noticed this (p. 3 of link)

    “…GM has also relied heavily on sales to rental-car, government and corporate fleets, which are less profitable than sales to individual customers. Retail sales — or sales to individuals — were up 11 percent industry wide through June, but up only 1 percent at GM.”

    If retail sales were this weak, it seems to suggest that a bulk of the sales are simply coming from government sales (as noted in the quote). And it seems “interesting” that profits would rise that much if retail sales at such a low level- perhaps, the government was overpaying for the cars? Second, why would anyone want to purchase GM through an IPO offering with the market this unsettled, and with retail sales drastically underperforming the industry?

    Hope this is helpful.

    http://www.thetowntalk.com/article/D9/20100813/NEWS05/8130325/GM-posts-big-profit-CEO-says-he-s-done-his-job

    Comment by Bo — August 13, 2010 @ 1:57 pm

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