GM Makes Case For Bailout With Ad
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.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.