Bailout Watch 498: GM CEO: Deeper, Faster, Oh Baby!

OK, so here’s the latest chapter in GM’s decades old inability to face reality. GM CEO Fritz Henderson told Automotive News [sub] that there’s nothing wrong with GM’s viability plan (or the company’s management leading up to its $22.8 illionb federal “loans”). GM simply failed to, uh, perform. “The viability plan, when you look at the finding, they basically said they appreciated what had been done—actually quite a bit of what had been done is correct. What they really said was they wanted things to go deeper and faster.” Uh, not as I recall it: “The plans submitted by GM and Chrysler on February 17, 2009, did not establish a credible path to viability,” pronounceth The Presidential Task Force on Automobiles (PTFOA). “In their current form, they are not sufficient to justify a substantial new investment of taxpayer resources.” Of course, the PTFOA gave GM $4.4 billion to tide them over to C11 anyway. And if you think I’m just milking this “deeper faster” thing for cheap laughs, well, here it is again . . . and again . . .

Most importantly, I think what we’ve made clear [to the United Auto Workers and GM’s bondholders] was that the criteria that were used before are not sufficient. We need to go deeper, we need to go faster to have a clean balance sheet.

And so, they clearly understand that to do this outside of a bankruptcy, we’re going to have to go deeper, we’re going to have to go faster. . .

The Treasury went through the report. They said they liked what the company is doing; they want to go deeper and they want to go faster.

So that’s what we’re willing to do. We’re going to take what we outlined and say, OK, we’re going to go deeper and faster; we’re going to re-look at all of our assumptions one more time. . .

We’re going to basically achieve these four criteria: having a structure, if you will, that will allow us to be more viable across the business cycle; cleaner balance sheet, deeper re-structuring, funding for advanced technology. . .

When we finish our business plan – the deeper, faster business plan – it will generate a projection of cash flows over a business cycle which will then say how much debt is sustainable in the balance sheet of this company. That’s an answer I will have in a couple of weeks or more.

As will we all.