GM Makes Case For Bailout With Ad

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The Senate may vote on an auto bailout as early as Tuesday after Congress sent White House details of a $15 billion rescue plan. General Motors is doing its best to ease the way. It has run full-page ads admitting past mistakes and promising to overhaul the company.

ROBERT SIEGEL, host:

And General Motors did something rare today, rare for GM or other companies, for that matter. It issued an extensive mea culpa to the American people. In a full-page ad in the Automotive News, an industry publication, GM all but begged for forgiveness, as NPR's Frank Langfitt reports.

FRANK LANGFITT: We acknowledge we have disappointed you, GM said in its letter today. The company has apologized before, but it took its mea culpa to a new level. In its statement, GM took responsibility for failing spanning decades, everything from building unreliable vehicles to making union deals it can't afford.

The letter was part of a public relations blitz to win support for the bailout bill. In a video on GM's website, Ray Young, the company's chief financial officer, hammered home the point.

Mr. RAY YOUNG (Chief Financial Officer and Executive Vice President, General Motors): A lot of people have indicated that we've made mistakes in the past, and, you know, as an officer of this company, I have to admit, you know, we have made mistakes in the past.

Mr. AARON BRAGMAN (Automotive Analyst, Global Insight): I think this is pretty much unprecedented in terms of really coming to grips with it and trying to level with the American people.

LANGFITT: That's Aaron Bragman. He follows the auto industry for Global Insight, a financial analysis firm. Bragman says this letter was more sweeping than earlier admissions. Among the errors GM owned up to, building too many brands, leaning too heavily on pick-ups and SUVs. Quote, "we have paid dearly for these decisions," the company said. Bragman said the letter was inspired by one thing.

Mr. BRAGMAN: Desperation. Quite frankly, they need the money. This is the last place that they have to get it. Nobody else is giving out any money in Wall Street. Despite the billions and billions of dollars of bailout money, they're still not lending.

LANGFITT: GM said it had learned from its mistakes and made improvements. It noted that it moved to slash union health-care costs in last year's contract with the Union of Auto Workers, and it's produced some popular vehicles recently, including the Chevy Malibu and the Cadillac CTS.

Many consumers criticized Detroit for making sub-standard cars. But Bragman says that's no longer fair. He notes that independent companies such as JD Power have given GM good marks against Japanese competitors.

Mr. BRAGMAN: Buick actually has scored very high in the last several years.

LANGFITT: Other analysts, though, were puzzled by the letter.

Ms. MARYANN KELLER (Principal, Maryann Keller and Associates): I think it's crazy.

LANGFITT: Maryann Keller has studied GM for decades and even written a book about the company. She says consumers are so hardened against GM, a letter won't make any difference.

Ms. KELLER: This is certainly not going to change public opinion. I think that General Motors management wants to save itself.

LANGFITT: Indeed, as GM is trying to improve its image, pressure is mounting for CEO Rick Wagoner to leave. Senator Christopher Dodd, the Connecticut Democrat, has championed the bailout. But on CBSs' "Face The Nation" yesterday, he said, if GM gets the money, Wagoner should go.

Senator CHRISTOPHER DODD (Democrat, Connecticut): I think you're going to consider new leadership. If you're going to really restructure this, you've got to bring in a new team to do this, in my view. I think he has to move on.

LANGFITT: In the past, Wagoner has dismissed the idea, and today, GM had no comment on Dodd's statement. But Maryann Keller says he's overseen so many mistakes, he should resign. Among other things, she cited one of Wagoner's decisions when he was running the company's North American division.

Ms. KELLER: Under his watch, the North American operation decided that what the United States really needed was a Hummer. The ace brand of General Motors coming out at a time when there were increasing pleas for energy self-sufficiency, improved fuel economy.

LANGFITT: Now, she says, GM can't find any buyers for that vehicle line.

Ms. KELLER: Who in their right mind is going to buy the Hummer brand? Hummer is not salable. It is not an asset that can be sold. It is a liability that General Motors is going to have to close.

LANGFITT: But not everyone wants to see Wagoner go. Allen Bensich(ph) is a retired United Auto Worker official. He used to run local 909 in Michigan. He says earlier GM heads made even worse errors than Wagoner has.

Mr. ALLEN BENSICH (Retired United Auto Worker Officer): Well, I think a lot of the big mistakes GM made were made before he became CEO. I don't see that he's any worse than any of the other corporate bosses.

LANGFITT: Of course, those old bosses are long gone. And now, it's up to Wagoner to convince Congress that he can lead GM to success. Frank Langfitt, NPR News, Washington.

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White House, Congress Near $15B Auto Rescue Deal

The White House and congressional Democrats continued to hammer out the details of a $15 billion rescue plan for the U.S. auto industry, but they appeared to be close to a deal, lawmakers said Monday.

The plan — which is expected to come up for a vote this week — is likely to include the appointment of a government monitor, who would oversee the restructuring of Ford Motor Co., General Motors Corp. and Chrysler LLC.

The monitor would be appointed by President Bush.

House Speaker Nancy Pelosi said the bailout is expected to help the auto industry survive until spring 2009. But she said the automakers would be required to show they have plans to turn their companies around.

"Come March 31, it is our hope that there will be a viable automotive industry in our country with transparence and accountability to the taxpayer," she said. "We think that is possible."

Rep. Barney Frank, the Massachusetts Democrat who heads the House Financial Services Committee, said the remaining disagreements with the White House could be resolved in a few hours.

White House Press Secretary Dana Perino also offered encouraging words.

"We've made a lot of progress in recent days to develop legislation to help automakers restructure and achieve long-term viability," she said. "We'll continue to work with members on both sides of the aisle to achieve legislation that protects the good faith investment by taxpayers."

The companies would be required to give the monitor access to their financial information, including company records and other data. Company executives would also have to get permission from the government's monitor to enter into business transactions that would cost $25 million or more, reports said.

The measure would provide for emergency loans to flow to the automakers before the end of December.

The "car czar" would have a Jan. 1 deadline for developing criteria to assess the automakers' progress. That person would also have the ability to recall the loans as soon as February if the companies' reorganization efforts were not adequate to ensure their viability.

From wire reports

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