I have written many business plans in my days, but writing one that will meet the requirements of 500 egotists, many of whom are totally clueless about business plans, would be way above my pay grade. If I were the CEO of GM here’s what I would present. I would, of course, drive this into Washington.
First, thank you for allowing me to present our plan to save GM, the millions of jobs and the tax revenue to cities, states, and the Federal Government. Let me begin by acknowledging we have made many mistakes in the past 30 years at GM. This plan does not address all of them, just the most critical. Here’s what we need from you to help us get back on our feet.
1. You must get the cooperation of the UAW to roll back all wages and benefits to the industry level. This will be frozen for 5 years. This is to be done for the good of the country and there is no negotiation.
2. You must get the states to eliminate laws that prevent us from reducing the numbers of dealers it takes to sell our products efficiently. We are prohibited by law from doing that now.
3. You must agree not to put new CAFE standards or carbon taxes on us until we have made GM profitable again.
4. You must waive all rules that disqualify our foreign made, fuel efficient ,cars from coming into the US. This will buy us time and give us an opportunity to sell those cars here while we retool.
5. You must put a $3.00 per gallon gas tax in place right now. Most countries in the rest of the world did this 15 years ago. Why? This prevents the whip saw effect we’ve had for the past 25 years. Gas goes down, people want big cars, gas goes up, they want small cars. Our industry can’t deal with these swings.
6. You must agree to let us make the cars people want to buy, not the cars you think people might want to buy.
7. The money Hank Paulson stole from you must begin to work if you expect us to succeed. If it was a mistake, then we can’t fix that if people can’t get loans to buy cars.
8. Emission laws must be frozen until we regain profitability.
9. You will have to pay unemployment to the 15,000 deadbeats we have in the job bank until they find a job where they actually report to work. And, the legacy retirements payments. Just look at it as enhanced social security, very enhanced. A pension you really collect on, unlike social security in 10 years.
While we have made lots of mistakes, your over regulation of our industry has been the number three reason for our failure. We are number one and the UAW is number two.
If you agree to the above, we will do the following. Go to one company that sells two brands, Chevrolet and Cadillac. We will cut employment to the bone, we will reduce our dealer group to no more than 1,200 of the very best. We will close plants and retool to build the kinds of cars we think consumers will buy with the $3.00 gas tax. We will make cars in each category that will sell in all 50 states, not unique cars for each state, so don’t start by changing the rules in California like you already plan to do.
We will change our board of directors and our top management. We will change our corporate culture. If we wipe the slate clean, we won’t have people giving us reasons why we can’t do things.
We can do this. There are any number of turnaround experts in this country who have tackled challenges like this and know what to do. Our top level people will all be from this school.
When our millionaire dealers who don’t make the cut begin to lobby you, please hold tight. When the UAW says you betrayed them, please hold tight. When Henry Waxman tries to ruin our business plan, please tell Henry to chill. When people become outraged over $6.00 gasoline, tell them that’s the way it is, conserve. Buy fuel efficient cars.
Our job is relatively easy, we know how to cut costs, re tool, and market. Yours is the hard one, you have to agree to do the things on our list. If you can’t do this just fold the U.S. auto industry just as you have folded the banking industry, soon the utility industry, the coal industry and all the other industries you have ruined with your meddling.
By the way, finance our loan with the new $3.00 a gallon gas tax. And, while you are at it, try drilling and doing the other things you need to be doing or it will be $10.00 a gallon gasoline and we can’t make this plan work at that level.
I normally agree with your comments, but I am going to take issue with your idea to initiate a $3/g gas tax and to limit foreign producers to compete here. We are currently paying $2/g and with your tax, that would put us at $5/g, with crude prices around $50/b. When crude does go up again and it will, gas prices will go up dramatically and that will ensure the auto makers will have to produce smart cars, because it is the only car that we will be able to afford, not to mention the impact on the economy You said you want the auto makers to produce cars the customer wants, not what the government wants them to produce. There are some mixed signals and inconsistent ideas in your plan.
My plan is this, keep the government out of our business and don’t allow them to bail them out and let the market take care of the auto makers and UAW. They ether get their act together or they will be out of business and someone else will come along to produce the cars we want.
Let capitalism work and keep the government out of our lives period.
Suck it up Ken. It’s the only way we can have automobile manufacturing in America. We’ve had 30 years of the OPECers jacking us around. We will only have the discipline to go to more fuel efficient cars if the price drives us there. If we drill the hell out of American we will still be sending money to the wrong people. We can’t get a hog’s share of the world’s oil when only 4 out of hundred Chinese and even less Indians drive cars today. Europe did this 25 years ago and they have fixed the fleet.
Bill,
I agree that the price of gas has to be higher and hiking the gas tax would be a good idea. And, if there is a substantial increase in the gas tax then there is no need for a carbon tax on cars and CAFE standards (even the new higher ones) will be easier to meet cuz people will want to buy cars that are more fuel efficient or they will want to buy cars that don’t run on gas at all. It is my opinion that $4+ gas would go a long way towards solving our dependence on foriegn supplies of oil and move us much quicker towards alternatives fueling our transportation.
Finally, your plan meets the criteria I set out in one of my earlier posts…. that nobody be happy with the agreement. Republicans would be outraged that oil companies are going to be hit with a gas tax increase and all those rich car dealers are gonna be forced out of business, Dems would be outraged that the unions are gonna have to feel the pain. Expensive for the taxpayer, but I like it!
Chris
I agreee with your plan. Maybe take part of the $3,00 and build infrustructer with it to put even more people back to work. Don’t run the money thru the general fund.
Bill- Everything is fine but for the $3/gallon gas tax. Too much can be done with that kind of tax–none of it good.
George Howison