Posted by: David Welch on November 20, 2008
Anyone who watched the Congressional hearings for a Detroit bailout will understand why Congress is waiting to vote and demanding a business plan before they approve a bridge loan. In a hostile environment, all three Detroit CEOs were utterly unconvincing. This is especially true of General Motors Chairman and CEO Rick Wagoner.
They all spent most of their time talking about what they have done to date. There was no plan detailing other things the companies can do to save cash and make sure the loan will be paid back. They didn’t offer anything resembling a business plan that showed how short they are and how the money will see them through the tough times. In a set of hearings where many lawmakers said that Detroit’s business model has failed, they didn’t have anything new to sell. Congress even had to pry out of them how much each company actually needs. That’s no way to approach a loan officer.
There was no salesmanship, either. When Lee Iacocca went to Washington in 1979, he offered to work for $1. (Granted, current Chrysler CEO Robert Nardelli did, too, but the other two didn’t immediately follow) Lido said back in ’79 that the company just needed money to tool up to make the K-cars. There was something in the pipeline to save the company if they could just get the cash to make them. Wagoner, Ford CEO Alan Mulally and Nardelli didn’t have such a plan. Though in fairness, Nardelli came closest to saying that he needed cash to engineer new cars. But none of the CEOs have Iacocca’s pitchman qualities.
In that sense, Wagoner was ill prepared. He’s a likable enough guy. But he has never been a fan of media coverage or the spotlight. He came off as aloof and avoided some tough questions. In fairness, Detroit hasn’t had a CEO with Lido’s presence since he retired. But if there was a week when Wagoner, Mulally and Nardelli had to rise to the occasion, it was this one. Now, they must sweat out more deliberations in Congress.