CanWest Slipping Towards Bankruptcy

As CanWest's financial troubles become more dire, it's beginning to look like Bankruptcy is a very real possibility in the coming weeks.

Potential investors including Fairfax Financial Holdings Ltd. want the Asper family to give up control of the Winnipeg, Manitoba-based company in return for a cash infusion, the newspaper said today, citing unidentified people.

At least one investor said that Chief Executive Officer Leonard Asper must step aside and that he and his siblings must eliminate a dual-class share structure that allows them to control the company, the Globe said.

Certainly, under the direction of the Aspers, CanWest has stripped the former flagships of the Southam newspaper chain of any editorial freedom. The result being a group of newspapers that spout what ever the neoCon talking point of the day is. Writers capable of being intelligent and engaging like Naomi Lakritz have become mouthpieces for right-wing drivel that might as well be written by Gwen Landolt. When the Quebecor controlled Sun Media newspapers have to come to represent a more balanced approach to journalism in comparison, one must conclude that thoughtful, intelligent journalism has truly withered under the Aspers.

I can only hope that whatever rises from the ashes of the Asper family's mismanagement of a media empire is capable of more intelligent and independent thought in its editorial boards than has been permitted from Winnipeg lately.

Is GM Headed For Breakup?

With the latest US bridge financing for the 'Big 3' dead on the Senate floor, one has to wonder what will become of them.

Chrysler will shrink to a shadow of its former self. (Those old enough to remember their show rooms in the early 80s will remember walking into a room full of K-platform cars and leftovers from the mid-70s. This time around, I suspect the remains will include a minivan, and possibly something based on a Mitsubishi platform ... and not much else.

GM on the other hand could be headed for a fate not unlike what happened to AT&T/Bell in the early 80s. GM has a couple of brands that I suspect will survive in some form or anther. I can see Chevrolet, Pontiac and Cadillac remaining fairly intact; Saturn will likely become a brand used to label whatever they can import from Europe and Korea. (Not unlike GM's ill-fated "Passport" and "Geo" brands - hopefully better managed than that...)

Buick will vanish - at least in North America, and I suspect the 'GMC' branded trucks will also go away - being otherwise identical to their Chevrolet-branded cousins.

Just at a guess, we'll see the following companies emerge from a GM bankruptcy in North America ("MiniGeMs"?):

1. Chevrolet - Mostly producing family cars and light trucks
2. Pontiac - Will try to position itself as a "near luxury" brand competing with Acura
3. Cadillac - Will continue to be Cadillac
4. Saturn - Will mostly become a dealership network selling rebranded Opel product.
No speculation on what will happen with their holdings in Europe and Asia - I simply don't know enough of GM's current holdings over there

All of those companies will be producing in much reduced volumes from today, and I expect their lineups to be trimmed dramatically.

Any guesses as to what shape GM takes on after a bankruptcy filing is, of course, purely hypothetical - based far more in my imaginings than anything even remotely real.

What the impact of a dramatic reshaping will be on the US and Canadian economies will be is hard to say - I'd have to imagine that it will be messy in the short term until the new companies start to take shape and fill the gaps. I expect the stock markets to take a nosedive on this, not because it's warranted, but because the stock markets are run more on emotion than on anything resembling rationality. Sit back, and hold on.