1. Under the Hood

General Motors ( GM) rolled out the hard sell this week.

The automaker met Tuesday with shareholders at its annual meeting, where CEO Rick Wagoner offered his latest turnaround update . "Our goal is to structure GM for sustained profitability and growth," Wagoner explains.

If that sounds like a laudable project, you'll surely admire GM's progress. Why, take a look at the first quarter. "We recorded our first profitable quarter in a year and a half," Wagoner says, as revenue hit a record $52 billion. "These were important milestones in our turnaround plan."

Pointing out milestones is hardly a novelty for Wagoner. Even so, the latest achievements stand out -- because when it was first reported, the first quarter was far from profitable.

Back in April, GM reported a preliminary adjusted first-quarter loss of $529 million. The GM North America business lost $946 million, and the worldwide auto business lost $721 million.

That all changed in May, though, after GM talked with regulators about a big health care settlement with its biggest union.

Revising its health care accounting allowed GM to cut its North America loss in half and its overall auto-unit loss by two-thirds. And instead of a sixth straight quarterly loss, GM ended up showing a first-quarter profit of $445 million.

While the change surely was proper, The Wall Street Journal reports that one analyst derided it as mere "accounting mechanics."

That doesn't sound like the basis for sustained profitability.

Dumb-o-Meter score: 90. "We have absolute clarity about the road ahead," Wagoner told shareholders Tuesday of planned changes in Detroit, "and I have no doubt that we will succeed." Speak for yourself.

To view Colin Barr's video take on GM's entry in Five Dumbest this week, click here .

2. Nothing Succeeds Like Succession

Cisco ( CSCO) CEO John Chambers just got what he always needed: a new title.

Two big decisions came out of the San Jose, Calif., networking giant's regular board meeting Wednesday. The company added $5 billion to its stock buyback plan and unveiled its board succession plan .

Wall Street likes buybacks, but it believes management planning is important too, particularly when a CEO is as visible as Chambers is. The consequences of failing to plan ahead were underlined this week by the unexpected death of L-3 Communications ( LLL) CEO Frank Lanza.

So what's Cisco's plan? Why, it's handing Chambers even more responsibility. He'll take the chairman's title from John Morgridge, who is retiring.

"We're building a management team for the 21st century that emphasizes collaborative leadership built on teamwork that drives innovation and speed of execution," Chambers said in a statement Thursday. "I couldn't be more proud of what Cisco has accomplished as a team."

With any luck, Cisco's team will never find itself in L-3's shoes. But Chambers will move on some day, presumably. So who might take his place ?

"Cisco has a history of making smooth management transitions, and in every organization of the company, there are multiple executives that could be future leaders," a spokeswoman waffles in an email. "As part of ongoing leadership development at Cisco, we groom multiple candidates for all leadership positions. It's also important to note that John recently recommitted to the board a minimum of three to five years with Cisco."

Sorry, but that hardly sounds like a plan for surefire success.

Dumb-o-Meter score: 88. With apologies to Mark Twain, reports of Level 3 (LVLT) CEO James Crowe's demise have been greatly exaggerated .

3. Where the Firms Have No Name

Morgan Stanley ( MS) turned the tables on Joe Perella this week.

The brokerage firm has suffered its share of management defections, thanks in no small part to 1980s merger whiz Perella. Last spring, for instance, some top bankers fled Morgan in a revolt that brought down former CEO Phil Purcell. The heaviest blow was Perella's April 2005 resignation, which reportedly left him in tears.

Then, early this year, another exodus ensued when Perella started making vague plans for his own firm. Perella managed to poach several Morgan Stanley hard-hitters, including Titus Leung and Dietrich Becker. But maybe his biggest splash came with the addition of Morgan's former co-head of global capital markets, Jon Anda.

"We can confirm that Jon Anda has agreed to join our team as we consider the formation of a new financial services firm," Perella said in a Jan. 11 statement.

Five months later, Perella is moving right along. Apparently he has managed to form the new firm and to raise millions of dollars from partners. On the other hand, it's still not clear what the firm is going to be called. And now he's losing people back to Morgan.

"It was announced today that Jon Anda will not be joining the financial services firm being formed by Joe Perella, as previously reported," a Perella statement said Wednesday.

Indeed, after what Morgan calls a break to "explore other opportunities," Anda is returning as vice chairman for institutional securities.

"I am thrilled to be back at Morgan Stanley," Anda says, "a firm with a great heritage, terrific talent and a bright future."

And an actual name, to boot.

Dumb-o-Meter score: 85. "We look forward to working with him at whatever firm he joins," Perella parries.

4. Tribune's Liquid Diet

If his big buyback plan doesn't work out, maybe Tribune ( TRB) chief Dennis FitzSimons can get a job on Wall Street. He certainly knows the lingo.

Two weeks ago the Chicago-based newspaper giant said it would borrow some money to buy back a huge hunk of stock . Tribune also set plans to sell assets and cut more costs in a bid to boost its flagging shares, which are down more than 25% over five years.

The moves "reflect our strong belief that Tribune's current share price does not adequately reflect the fundamental value and long-term earnings prospects of the company's businesses," FitzSimons said in a May 30 press statement. "They also allow us to optimize our capital structure while maintaining financial flexibility."

That sounds optimal indeed. But this week a filing showed that three directors opposed FitzSimons' plan when it came up for a vote. The Wall Street Journal reports that the Tribune board has been considering a possible spinoff of broadcast assets, too.

The developments left Tribune defending the buyback plan, which "was approved by a clear majority of its board of directors as being in the best interests of all shareholders," the company said Thursday.

Surprisingly, Tribune's plan seems to be in the best interests even of shareholders who don't want to be shareholders anymore. "This tender offer allows the company to return value to shareholders who may be seeking some liquidity," Tribune explains, using a favorite euphemism for selling.

Don't worry, though. We're sure all the sellers are just diversifying their portfolios for tax-planning purposes.

Dumb-o-Meter score: 82. We can't imagine anyone views Tribune as a "source of funds" -- another Wall Street term for selling.

5. Mad at the Market

Matria ( MATR) is all mixed up.

Shares plunged 18% Thursday after the Marietta, Ga., disease management company slashed 2006 revenue guidance by $26 million.

The setback marks the second time in two months that Matria has offered disappointing guidance. Matria has been the target of short-sellers who point to management turnover at the company and its recently acquired CorSolutions unit.

But CEO Pete Petit says the drop-off in business isn't Matria's fault. And who is to blame? Why, it's those scoundrels in the market.

"The market's reaction to our acquisition of CorSolutions appears to be a general delay in awarding new-employer business to Matria," Petit says in a Thursday morning press release. "As a result, we have lost some revenue momentum that cannot be recovered during 2006, but has slipped into 2007."

It's not clear how the market can withhold new-employer business from anyone. Petit does admit, though, that because of the size of the CorSolutions deal, "consultants and prospective clients are being cautious."

Given Matria's muddle-headed take on its decline, we can't blame them.

Dumb-o-Meter score: 78. "To mitigate this concern going forward, we are helping our prospective clients understand the company's significant capacity to absorb new growth," Petit adds. We're sure that will do the trick.
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