Detroit MI: The Detroit Automotive Digest published the following letter from GM's new CEO that was sent to all GM employees. The letter fills in some key elements leading up to the government bailout and bankruptcy of the giant automaker.
OFFICE OF THE GENERAL MOTORS CORPORATION CEO
31 March 2009
TO: GM Management, Labor Unions, and all other GM Employees
FROM: Current CEO
SUBJECT: Why GM has failed as a Corporation
a. LETTER to All GM Departments and Divisions from the CEO, 15 Dec 2007
b. REPLY from Accounting; we only count the beans, 16 Dec 2007
c. REPLY from Finance; we still have some money in the bank, 17 Dec 2007
d. REPLY from Engineering; Japanese what? 18 Dec 2007
e. REPLY from Production; call us in a year, 19 Dec 2007
f. REPLY from Labor; we have contracts, 20 Dec 2007
g. REPLY from Purchasing; do you think this is government contracting?, 21 Dec 2007
h. REPLY from Management; ha ha ha ha ha! 22 Dec 2007
i. REPLY from Marketing; Americans want SUV's, 23 Dec 2007
j. REPLY from Dealerships; keep sending us those gas guzzling SUV, 24 Dec 2007's
1. Bankruptcy Papers, 1 April 2009
Men and Women of GM,
As your new CEO, as of 30 March 2009, I feel a need to share with all of GM's valued employees what has transpired in the last 16 months. My predecessor CEO had tried to stem the flow of "red ink" prior to my appointment as CEO (GS13 level).
My predecessor called, faxed, twittered, met with and finally wrote a formal letter, Reference (a), to the various GM Departments outlining corporate survivability issues and asked for help in their resolution.
He requested that in light of a looming recession "Accounting must get a handle on cash flow; Finance needs to figure out a way to stop losing $2500 per car; Engineering should design small Japanese like cars; Production must scale back the number of cars manufactured or close down assembly lines and manufacturing plants on some models; Labor needs to take a reduction in wages and benefits, Management must not take any retention bonuses or buy any new corporate jets; Purchasing should negotiate better prices with subcontractors; Marketing has to do some research on market share if a recession occurs and gasoline prices go up; and GM Dealerships should sell off all their current inventory."
References (b) through (j) provide the responses from the various GM Departments to my predecessor's letter. These replies all seem to indicate "GM has always done it this way and don't need any stinking changes." Thus, my predecessor had to ask the government for bailout funds in November 2008.
The issues that have been plaguing GM Corporation are still mainly unresolved. Therefore, I have but no choice to declare a GM bankruptcy, Enclosure (1), and wish the Federal Court appointed Bankruptcy Judge "good luck."