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

Robert Farago
by Robert Farago
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.

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2 of 17 comments
  • Redbarchetta Redbarchetta on Apr 14, 2009

    So does this brilliant management team go to the "good" GM or the "bad" GM when the company gets split up? I personally don't they are competent to be cleaning toilets in Ren-Cen. GM would be better off headless with all the management gone and no one to lead, at least there is a chance they might go in the right direction however small it is.

  • Landcrusher Landcrusher on Apr 14, 2009

    They should find some guy who has run a small garage for 30 plus years, and put him in charge. Any financial plans he doesn't understand, he should veto. That would have to be better than anyone presently near the top of the org chart.

  • ToolGuy "We're marking the anniversary of the time Robert Farago started the GM death watch and called for the company to die."• No, we aren't. Robert Farago wrote that in April 2005. It was reposted in 2009 on the eve of the actual bankruptcy filing.The byline dates are sometimes strange/off with the site revisions (and the 'this is a repost' note got lost), but the date string in the link is correct (...2005/04...). Posting about GM bankruptcy in 2005 was a slightly more difficult call than doing it in 2009.-- The Truth About Calendars
  • Kat Laneaux Agree with Michael500, we wasted all that money just to bail out GM and they are developing these cars in China and other countries. What the heck. I understand the cheap labor but that is just another foothold the government has on their citizens and they already treat them like crap. That is pretty disgusting to go forward to put other peoples health and mental stability on a crazy crazed, control freak, leader, who is in bed with Russia. Thought about getting a buick but that just shot that one out of the park. All of this for the greed. They get what they lay in bed with. Disgusting.
  • Michael500 Good thing Obama used $50 billion of taxpayer money to bail them out and give unions a big stake. GM is headed to BK again with their Hail Mary hope of EVs. Hopefully a Republican in office will let them go BK the next time, and it's coming. The US economy is not related/dependent on GM and their Chinese made Buicks.
  • MaintenanceCosts "Rural areas hardly noticed COVID at all."I very much doubt that is true in places like the Navajo Nation or the Kenai Peninsula in Alaska, some of which lost 2% or more of their population to COVID.No city had a death rate in the same order of magnitude.Low-density living is a very modern invention. Before cars, people, even in agricultural areas, needed to live densely to survive.
  • Wjtinfwb Always liked these MN12 cars and the subsequent Lincoln variant. But Ford, apparently strapped for resources or cash, introduced these half-baked. Very sophisticated chassis and styling, let down but antiquated old pushrod engines and cheap interiors. The 4.6L Modular V8 helped a bit, no faster than the 5.0 but extremely smooth and quiet. The interior came next, nicer wrap-around dash, airbags instead of the mouse belts and refined exterior styling. The Supercharged 3.8L V6 was potent, but kind of crude and had an appetite for head gaskets early on. Most were bolted to the AOD automatic, a sturdy but slow shifting gearbox made much better with electronic controls in the later days. Nice cars that in the right color, evoked the 6 series BMW, at least the Thunderbird did. Could have been great cars and maybe should have been a swoopy CLS style sedan. Pretty hard to find a decent one these days.