What's Good for General Motors . . . Would Be a Miracle
Sitting across the breakfast table from General Motors Chairman Rick Wagoner yesterday morning at the St. Regis gave the sensation of meeting the last emperor.
There he was, resplendent in navy suit, red power tie (for St. Patrick's Day?), and a crisp white dress shirt with bold blue stripes. It was the traditional ceremonial dress of the line of industrialists who reigned during the latter decades of the 101-year GM Dynasty -- a line of rulers that quite possibly could die with Wagoner if the automaker goes into bankruptcy.
When the dynasty thrived, he was a model of 20th-century corporate power and prestige -- Duke basketball! Harvard Business School! Finance wiz! -- but yesterday all he could speak of was misery and misfortune in the realm.
"Unprecedented economic times," he bemoaned over his fruit plate. "Huge impact on the auto business. . . . We have been hit particularly hard. . . . Painful. . . . Difficult adjustments. . . . Tougher times. . . . I wouldn't wish these times on anyone. . . . We are absolutely hands-full. . . . Tough stuff."
And that was just his opening statement. Questions tossed his way revealed more sources of woe. Health-care costs? "Absolutely crushing." GM's suppliers? "Getting more precarious . . . pretty, pretty drastic." Which cars are selling? "Not much is selling. Let's be honest: This is just plain weak."
Then, of course, there was the big issue: a prepackaged bankruptcy for GM, which most auto industry analysts expect. "It could work," Wagoner allowed. "And it might not work, and if it doesn't, it could mean in the end a long period of bankruptcy, which I believe would result in the liquidation of the company."
He was so miserable that it took him 35 minutes to touch his food -- and then he ate only two slices of strawberry.
His audience -- two dozen journalists circling a massive oval table -- had reason to be understanding. The organizer of the breakfast, the Christian Science Monitor, has already announced plans to stop printing. The other publications represented are in varying stages of decline. It was as if a pack of velociraptors were interviewing a Tyrannosaurus rex.
As Wagoner described the company's gloomy economic forecast, the moderator, Dave Cook, was sympathetic: "We're from the newspaper business. We understand."
But newspapers, at least, are going out of business without any government help. Not so GM, which got $17 billion from the feds and needs more money from the taxpayer, who has had about enough of it. Only 30 percent of Americans think it is right for the government to provide the loans to the automakers, according to a Pew Research Center poll released this week, and that was before the AIG bonuses set off a new round of public outrage.
"I think it would be better for all of us if this weren't playing out this way," Wagoner said of the reaction to the AIG bonuses.
"Does it make you bitter," asked Cook, that the bonus-happy insurance company got $170 billion of bailout money while "GM and Chrysler have to jump through hoops to get $22 billion?"