A new GM plan to entice Congress
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.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
