The Only Plan That Will Work

While Wagoner at GM has stated that bankruptcy is not an option, I respectfully say, wake up and smell the coffee … along with the oil, gasoline and brake fluid while you're at it. You lost $181,000 per minute in the second quarter of this year. For all intents and purposes, GM is already bankrupt!

At least, if the Big Three file for bankruptcy, they could restructure all those budget items that are draining them of cash every minute of every day ... too many car dealers, job banks for their laid-off workers, too many makes and models, retirees' packages, etc.

Off-loading all those union contracts that act like a noose around the Big Three's throats would give them a chance to survive and compete once again by throwing out existing liabilities and re-working obligations to affordable levels. As long as all those contractual liabilities remain the same, bailouts will NOT work.

Congress, with some members on the dole from organized labor, does not have the backbone to step in and really do what must be done to save Detroit … to tell the UAW to back off.

I must confess, I do feel a twinge of pain for GM and Ford when I urge a move to a Chapter 11 reorganization. Although, of the three top executives, I believe that only Mulally of Ford is the only one worth saving.

He, at least, has tried to shake things up in the past two years as the top executive by cutting costs, raising money by mortgaging assets and eliminating the stock dividend in the early days of his regime.

But to Mr. Nardelli, I say GO HOME!

You walked out of Home Depot, $210 million richer, after shareholders finally got rid of you. You made a PRIVATE investment in Chrysler with your own money thinking you and the pros at Cerberus Capital knew more about auto making than Daimler-Benz. You took a private businessman's risk; you have no place at the public trough. Take your lumps like every other hedge fund guy.

If we, as taxpayers, want to see Detroit survive … let them totally restructure their business. Don't put a tourniquet on a cancer.

My favorite observation from the Capitol Hill Bailout Follies comes from a money manager who said, "We're funding a day care center for people with extinct skills."

Detroit, here's a concept: Come up with a plan to build cars that Americans want to buy - at a reasonable price - while making yourself a reasonable profit.

Tough times pass ... flawed businesses don't.

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