Struggling GM Launches Internet Casino
Flint, Michigan, July 29, 2007 -- General Motors, the automotive behemoth that has been teetering precariously on the verge of bankruptcy for several years, will be taking the unusual step of diversifying its operations by launching an internet casino business in an effort to create a new cash cow that can be milked to keep its core operations alive.
According to Randy Mooman, spokesman for GM, the new casino is projected to provide sufficient revenue to keep GM afloat while it retools with new, more competitive automotive product lines.
"The direct benefits and dynamic synergies are virtually self-evident," said Mr. Mooman, "despite the fact that this represents what many may view as a slight departure from our primary mission, that of manufacturing and selling large, ungainly, gas-guzzling vehicles to poorly-informed consumers. And a major portion of the massive revenue stream the casino is projected to generate will be funneled directly into our R&D department to finance the rollout of new, slightly more ungainly and slightly less fuel-efficient vehicles over the next five to ten years."
The new GM casino, appropriately titled "General Motors Acceptance Casino", will go live on the web next month at generalmotorsacceptancecasino.com. The launch will be accompanied by massive cross-market media and advertising exposure, financed primarily by the casino's main underwriter, GM investor Kirk Kerkorian.
Mr. Kerkorian, who had been actively pressuring GM to lower costs well beyond the levels achieved by the structural changes, plant closings and layoffs undertaken in 2005 and 2006, was the moving force behind GM's internet casino concept.
"Mr. Kerkorian quite rightly studied the prevailing markets and profitability of the internet casino business, juxtaposed those numbers with additional benefits that could be accrued by utilizing GM's extensive market base and infrastructure, and sold the concept to the board with virtually unanimous approval," said Mr. Mooman.
According to Mr. Mooman, the advantages of the GM Casino are so many that success is virtually assured.
"First of all, internet casinos as a group are immensely profitable," said Mr. Mooman. "There's virtually no more efficient, technologically streamlined means of separating fools and gambling addicts from their money. However, beyond that winning base premise, GM possesses a huge collection of assets that can work synergistically with the casino concept and put us on an entirely different plane of profitability altogether."
Continuing a successful tradition established in the early days of the industrial revolution, in which employees were often paid in bottles of whiskey or credit at a company-owed store rather than in cash, Mr. Mooman explained that GM will create an instant customer base for the GM Casino by offering a "gaming bonus" in the form of playable markers good at the GM Casino to each of its roughly 150,000 employees worldwide as a replacement for a portion of their monthly salaries.
"That should prime the pump, so to speak," said Mr. Mooman. "Our bean-counters have determined that nearly 30% of players who get an initial taste of online gambling go on to become regular players, with a healthy 5-10% turning into full-scale addicts."
GM will also be offering "virtual casino chips" to employees as an optional replacement for the crushingly expensive employee-subsidized health care packages that have been siphoning off such a disproportionate share of GM profits.
"Nothing's mandatory, of course," said Mr. Mooman, "because, according to some of our more conservative legal counselors, that could run us afoul of certain gaming and ethics regulations in some states. But we're going to give our employees the chance to choose between a health care package valued at about $3,000 annually, or $5,000 in casino chips. I think a lot of them, particularly the healthier ones, will jump at the chance to potentially win a good deal more in the GM Casino."
In addition to the internet service, GM Casino hopes to rapidly expand its customer base by offering access to the casino via kiosks set up at GM dealerships nationwide, in recreational areas of GM assembly plants, and through its extensive OnStar emergency car service.
"Regular consumers will be able to participate in an audio version of, for example, Texas Hold 'Em, while driving or sitting in traffic," Mr. Mooman said. "All bets, winnings and losses are easily tracked directly to car owners through the service."
GM also plans to dispose of some of its less profitable models by offering them as incentives and prizes for winners in the GM Casino.
"We'll be holding daily, weekly and monthly grand slam poker tournaments where the prize will be one of our less attractive and hopelessly fuel-gobbling models," Mr. Mooman said. "That will at least get them out of our holding centers and on the street where they belong."
GM shares were up nearly 3/8ths in aftermarket trading on the announcement.
By Ion Zwitter, Avant News Editor
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