If you’re a U.S. taxpayer you ought to read GM’s “Restructuring Plan for Long-Term Viability.” By the end of next year, you’ll own a good chunk of this company, so you might as well familiarize yourself with what’s going on there.
On first read, you’ll think that’s too rash a judgment. The document is well-reasoned and thoughtfully crafted. There are lots of numbers “proving” GM’s commitment to restructuring.
But at its core, it’s propaganda aimed directly at warming the hearts of Congress.
It is not a viable business plan.
Think of the document more as a political tool — and it makes perfect sense. After all, it is Congress — not GM’s board of directors — that have the power to okay GM’s staggering $18 billion request.
As you might expect, GM’s tone is very, very patriotic. And it’s conciliatory — no surprise given how poorly November’s bailout hearings went.
In the intro, GM magnanimously acknowledges it has made mistakes in the past. There’s a special section detailing the shutdown of its corporate aircraft operations, with the odd, guilt-inducing tidbit that it “unfortunately impact[s] approximately 50 hourly and salaried employees.”
And the appendix has a special chart detailing that CEO Rick Wagoner and President Fritz Henderson didn’t actually receive the millions claimed by the media.
About a tenth of the document is dedicated to GM’s newly-won, but apparently profound, concern with fuel efficiency and advanced propulsion development.
The Chevy Volt which delivers “up to 40 miles on a single electric charge” — will apparently be the next Model T. “Volt represents a fundamental reinvention of the American automobile industry. . . . No other company has made such a commitment to the American people.”
As for the meat and potatoes of the actual proposed restructuring, GM gives a good effort. It projects the U.S. auto industry supporting 12 million new cars in 2009 and 13.5 million in 2010. Not unreasonable. And GM makes the right noises about cost reductions with “wages and benefits fully competitive with Toyota by 2012.”
But the restructuring plan comes up short on the most fundamental question. Will this company actually make money? Just look at the details — or what details are lacking.