Robert Lutz, a General Motors executive and one of the most outspoken auto industry executives in the past 25 years, said on CNBC’s “Closing Bell” today that he believes that some analysts with short positions are the impetus behind negative stories about the automaker recently.
CNBC, in it’s infinite wisdom, is running an online poll on the issue. See here. As if an online poll, the results of which will be shown on the air later this week, has any credibility.
The fact that Lutz is simply repeating the same allegations made by Overstock.com President Patrick Byrne and others claiming that business journalists are being duped by short sellers is humorous if not downright sad. He’s implying that the decline in the stock price has nothing to do with the fact that GM has lost billions in the past year, has been forced to renegotiate with its union and its parts supplier for more favorable terms and failed to anticipate the interest in alternative fuel automobiles. Wake up to reality, Mr. Lutz. Business journalists don’t need shorts to write negative stories about your company. It’s a negative story all by itself.
As former BusinessWeek reporter Gary Weiss mentioned on his blog recently, business journalists haven’t been getting such a bad rap since the 1970s, when Barron’s legend Alan Abelson was basically accused of the same thing.
In 1977, a lawsuit brought by a Technicare Corp. shareholder accused Abelson of providing tips to these short sellers in advance of negative articles about companies. Abelson denied the charges, which were never proven. “Back in the 1960s, people used to threaten to punch me in the nose when I said something negative about a company,� responded Abelson to the Washington Post. “Now we live in different times. The suit is obviously an attempt to keep me quiet.�
Today’s business journalists should take the same tactic. Don’t be intimidated by the bullies of corporate America.
Maybe Lutz is still smarting from his negative portrayal in New York Times’ business writer Keith Bradsher’s “High and Mighty,” which heavily criticized the auto industry for making unsafe SUVs.
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