Automotive bailout stipulates firms must be viable by 4/1/2009

The Bush administration has  finally agreed to a $17.4 billion bailout of GM and Chrysler.  I’m wondering how the Boards of these companies can, in good faith, accept the financial assistance.

One of the stipulations is that the companies be “viable” by 01APR09.  What does “viable” mean?

Does “viable” mean:

  • They don’t come back to Washington again and ask for additional financial assistance?
  • They guarantee some level of employment for automotive industry employees?
  • Does it mean that all the strategic realignments are in place?
  • Does it mean that any non-competitive aspects of labor agreements have been corrected?

How can the Boards accept money given that they are supposed to be “viable” in about three months?  It’s absurd.

And, so the Bush administration can further the illusion of providing  “sound leadership” in this matter, these firms have to rid themselves of perks like corporate jets.  What a bunch of hooey!

While this may play well with the American public, the American public has little insight in what air travel is like and the tremendous inefficiencies commercial air travel creates.  A private jet is a tool to create efficiencies, it’s not a perk!

It is unrealistic to expect these companies are viable 100 days from now.  If they worked diligently, they’d have the beginnings of a plan that they could begin to execute.

What do you think?

Dave Gardner, Gardner & Associates Consulting


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