I have just one word to describe General Motors: “irresponsible.”
The depths of GM’s troubles were brought fully to light in its proposal, released late Tuesday. In November, GM said it could run out of operating cash sometime in the first six months of 2009. Now it appears that GM could fail in a matter of weeks without immediate aid.
“There is no Plan B,” said Fritz Henderson, GM’s president and chief operating officer, who faces a 30% pay cut himself. “Frankly, the shortage of liquidity does focus the mind.”
Together, the Big Three U.S. automakers are asking Congress for $34 billion in low-cost government loans — $9 billion more than the roughly $25 billion the automakers had sought just last month.
The executive team and board of directors has been asleep at the wheel, literally and figuratively. This has been a long-time coming and they act like they were broadsided with no warning.
First, how can the company not have a plan B? Bankruptcy is intended for exactly the predicament it finds itself in. Second, the burn rate at the company should have signaled years ago that something was wrong and dead weight and fat needed to be trimmed. Third, a 30% paycut of a million bucks is not nearly enough for executive misfeasance or malfeasance; he executive team and board need to be replaced in return for Federal assistance.Anyone else running a business like GM would have been canned long ago.
Perhaps GM managerial staff should be paid according to the Federal schedule.