A new GM plan to entice Congress
The board at General Motors met over the weekend to discuss a restructuring plan that might work for Congress. Ashley Milne-Tyte tells Steve Chiotakis the plan includes a possible bankruptcy filing just in case.
Detroit skyline with General Motors headquarters standing tallest (Spencer Platt/Getty Images)
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TEXT OF INTERVIEW
Steve Chiotakis: There's that old adage "persistence pays." And General Motors is hoping another chance before Congress could be the difference between life and bankruptcy. Over the weekend, the GM board met to discuss a restructuring plan.
Ashley Milne-Tyte joins us now to talk about it. Ashley, what do we know?
Ashley Milne-Tyte: Well, GM CEO Rick Wagoner has already made the case in Washington that government money is the only way the company will be able to turn itself around. Reports out today suggest that GM's board is keeping itself open to all sorts of options -- including a possible bankruptcy filing in case that money doesn't come through. But meanwhile, GM's management and the board are focused on crafting a plan to revive the company that lawmakers are actually going to believe in.
Chiotakis: So what's likely to be a part of this plan?
Milne-Tyte: Well, pay cuts for executives, for one thing, that was something that didn't go down well at all in Washington last month. Lawmakers felt that auto executives just didn't get it when it came to executive pay -- I mean, GM paid out more than $40 million to top executives last year, even as it was losing billions of dollars as car sales sank. It could also involve further concessions for the union. Right now, laid-off workers continue to be paid about 90 percent of their salary. And probably getting rid of some of GM's brands, that may well happen, and production capacity could be cut again.
Chiotakis: Hmm. So these plans coming soon, tomorrow of course a big day for the auto industry for another reason, right?
Milne-Tyte: Yeah, that's right -- tomorrow's the day November car sales numbers are out, and they're expected to contain more depressing news for the industry. Last year, 16 million cars were sold in the U.S. And tomorrow's numbers could show that this year, it's closer to 11 million. So big drop there.
Chiotakis: Ashley Milne-Tyte joining us from New York. Thanks, Ashley.
Milne-Tyte: You're welcome.
Comments
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From San Antonio, TX, 12/01/2008
Ashley Milne-Tyte's numbers of cars sold was very jarring information. This is such an elementary question that i apologize in advance, but what is the market for cars in the US? As I watched cars being advertised as holiday gifts for the past few years, I have wondered how vehicles shifted from transportation to lifestyle accessory. I still see those ads this year. Are the manufacturers just trying to sell too many cars, even if the economy were doing better?
Are there market study numbers out there on how many cars we need in the US? How many we want? thanks.
Are there basic numbers
12/01/2008
I am sure the Buggywhip Manufacturer's Association, and the Wooden Wheel Producers would have made the SAME assertions 100 years ago before a Congressional Hearing. These (Ford and GM) people have had 30+ years to wake up and smell the coffee, since the FIRST Arab Oil Embargo. They didnt. That was their choice, their consequence. Bypass the middleman save the billions for unemployment benes!!
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