The Auto-Industry Cure

As the big three entered their plea for help on Capitol Hill, their gleaming corporate jets stood ready to whisk them back to their corporate headquarters. The media pounced on this and America became outraged. Who is running their P.R. operation??? This should be the first department within each firm that should be gutted. While most on Capitol Hill favor some type of assistance to keep them on life-support through these illiquid times, they have to clearly show the Capitol Hill crowd as well as the American public that they have a plan for long-term survival. There is no question that most of us here in the Midwest want to see them survive.

The Nardelli Idea
One of the not much noticed, nor talked about ideas that come out of the Capitol Hill hearings was one put forward by Bob Nardelli (CEO--Chrysler). He opined that perhaps a National Lab could be created to develop alternative fuel sources for the transportation industry. His reasoning was that it didn't make much sense for each of the big three to push R&D funds into developing alternative fuels when we could get economies of scale by funneling some cash to one lab and transfer the technology. Good idea, but why create another government lab when one of our existing labs could develop a technology. The talent pool is already there at Fermi, Argonne, Los Alamos, or Sandia.

Ford
Already on its way to becoming a winner. I suspect that it is just a liquidity problem as the banks tighten their lending programs and the market for commercial paper is not particularly strong. Should consider having its finance unit apply to become a bank and seek Troubled Asset Relief Program (TARP) funding. Treasury could package a nice deal that would benefit the taxpayers and help Ford provide funding up and down its supply chain and to its dealer network.

Chrysler
Can easily be a winner on its own. It has some of the best management and financial minds with Cerberus as the private equity firm that owns this puppy. Again, Chrysler can have their financing unit apply for bank status and tap TARP funds with strings attached. Like Ford, such a move could eventually create a self-sufficient credit facility to insure their long term survival.

GM
The biggest loser among the bunch, but necessarily a lost cause. It is well past time to break this monster up. Here too, the GMAC could apply for bank status and then tap the TARP funds to ensure liquidity is injected into their system. Other steps that will need to be made if we are to see its survival might include the following:

1. Rick Wagoner (CEO) must go. This guy proved to be, through his utterly abysmal performance in testimony on the Hill, that he is a bobo. Where did they recruit him??? Off the ninth hole at the nearest country club??
2. Put a dagger in the Pontiac brand. Transfer the TransAm / Firebird nameplates to the Saturn division.
3. Spin-off the Saturn brand as a "employee-owned" company. Perhaps Kirk Krekorian through his Tricinda Corp. could re-emerge as a major investor and put this unit on the road to profitability.
4. In recent years the Buick brand has become a solid and creative unit that has tremendous market share in China of all places. This division could also be spun-off to profitability. Perhaps Carl Icahn and T. Boone Pickens could team-up to place solid management in place to run the company. It would give Boone an outlet to develop a top-selling vehicle that runs on nat-gas.
5. The new GM could be composed of Chevorlet, Cadillac, and Hummer. If the leftover management can't make with whatever funds are made available to them as well as their highly touted Chevy Volt, then bankruptcy will be the road they will need to travel.

UAW

These fellas need to get out of their 1930's thinking and start to think competitively. The only other option will be to get run over by the global economic pressures. Their goal should be to become a stakeholder in the survival of each of these companies instead of an impediment to their economic viability. This is a classic case of Union leadership out of touch with those that work on the factory floor. The goal here is to create and preserve American manufacturing jobs not play the "pta" game. The usual featherbedding, instituting of stupid work rules that impede productivity, and labor banks must go.

Government

Get out of the manufacturing business. Stop trying to micro-manage how autos should be made, what standards for fuel mileage and safety need to be met. There is a viable independent sector that educates consumers on what are the best automobiles available for purchase. If a manufacturer wants to create a Yugo, then they will fail !!!!!!

It is hard to believe that in the early age of the automobile there were more than 2500 different "manufacturers" and now we are down to three. It is incumbent upon all the players in this high-stakes game to insure their survival. But it will have to be done with pain, sweat, and creativity. It is time for this industry to embrace the twenty-first century or surely it will go the way of the Checker, Cord, DeSoto, Duesenberg, Hudson, Nash, Packard, Studebaker, Stutz, and Tucker to name a few of the glorious brands that drove American roads.