Earlier in the week, the Big 3 auto CEOs took a lot of flak for flying their private jets to DC to lobby Congress and the President for a bail out. I suppose that Detroit-sized tin cups don't fly well commercially. Judging by the bipartisan congressional response to their request this week it does not look like there is any guarantee of a bailout before Obama takes office. And by then, it might be too late. The recent flying gaff is reason 1,001 not to bail out these three organizations. Not only does it show how out of touch their leadership is with their customers and the current economic situation in the US -- it shows a level of arrogance and aloofness that proves these companies (not to mention the current management) do not deserve to remain in business. Before jumping the gun and telling me that their workers and retirees should not be faulted for management's shortcomings, I should remind everyone that it was the unions that in part created the economic liability which make their current business models untenable.
But what of the billions owed to their supply base? What will happen in a bankruptcy situation? It's bad news all around. Most likely, under a Chapter 11 filing (which GM has said they have no intention of pursuing which makes them, according to one source, look just like Lehman did weeks before its demise) suppliers would get something. But in a liquidation situation (Chapter 7), anything --including nothing -- is possible. Methinks the better path here to rebuilding Detroit is most certainly to let suppliers with viable business models tap into some type of government aid to see themselves through the transition period when GM, Ford and/or Chrysler file for court protection from creditors. Regardless, one thing appears clear. And that's GMs increasing denial of the truth and their entitlement expectations that a bailout is forthcoming. In my view, their inability to even prepare for a bankruptcy situation is further evidence that we need to let the invisible hand pluck these jokers off the highway for good. Doing so will free up the road for all of us even if a transition proves painful. Perhaps then, Big 3 management will begin to fly commercial -- to their next job interviews.
Postscript: Some might argue flying commercial is a poor use of time. But in situations like this, I'm sure that a CEO could spend quality air-time with their aides (SPELLING MISTAKE CORRECTED AND NOTED 🙂 on a commercial flight getting work done. Moreover, this is a PR game as much as anything, and flying private while shaking the tin cup reeks of hypocrisy, at least in my book..
- Jason Busch