Disinvestment by Investors

"Pleasing Wall Street" means getting the stock price up.

The first question is, why do GM managers care about the stock price, other than culturally? Because for the guys at the top - and they are guys - their compensation is in stock, which is the stock price. So compensation has moved from formulae that bore some relationship to the functioning of the organization to something completely irrational based on stock analysts [the PR department of the brokers].

But what do these people want? They want GM to disinvest in people [layoff and cut salary and benefits] and equipment [get rid of plants], and give the cash to the "investors."

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http://www.freep.com/apps/pbcs.dll/article?AID=2005511240314

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Just what can GM do to please Wall Street?

Investors urge plant closings, fewer brands

November 24, 2005

BY MICHAEL ELLIS and JOE GUY COLLIER

FREE PRESS BUSINESS WRITER

What will it take for General Motors Corp. to really return to profitability? According to the experts on Wall Street, the automaker must do a lot more than just cutting 30,000 jobs and idling 12 plants in North America, which the automaker announced this week.

Not until GM gets rid of at least one of its eight U.S. brands, weathers difficulties at its largest parts supplier, Delphi Corp., and forces its unions into more concessions will the automaker win back favor with investors, they say.

They also want GM to cut more of its manufacturing capacity. In other words, idle or close even more plants.