By Jon Miller Published on December 2nd, 2008

Chrysler wants $7 billion. They asked Congress for this taxpayer money in a 14-page document. I bet they could do it for $500 million if they only took the time to give the PDCA wheel a few turns and put their proposal on a single page A3.
Ford has asked for a $9 billion line of credit, even though they might not need it. Wink. Oh, and $5 billion to help us design and make cars people want. Heck, CEO Mulally could work that off in only 461,467 hours if he gave up his $10,835 hourly rate of pay. Ford expects to return to profitability by 2011 under their plan, if their projection of the length and depth of this recession are correct. We didn’t see it coming, but we know where it’s going, is it?
GM upped the ante by asking for $18 billion, a raise of $6 billion, and an immediate injection of $4 billion to avoid going belly up by the end of the year, “a fact it hadn’t before disclosed.” according to the Wall Street Journal. Incompetent or dishonest? It’s hard to say.
At least our government is seeking advice on how to handle the situation:

The urgent call for help comes as lawmakers have begun reaching out to Wall Street experts to explore how the government could help the companies prepare bankruptcy filings that would take them in and out of Chapter 11 protection quickly, with much of the financing and other restructuring measures worked out with creditors in advance

‘Cause those Wall Street bankers sure know how to get us out of a financial mess.
Exit sarcasm, enter hope. Let’s see what the next 2 weeks will bring for the embattled US auto makers.

  1. Andy Wagner

    December 3, 2008 - 7:43 am

    I probably shouldn’t defend them too much, but I feel like Ford is in a different category.
    Mulally has given them an outside perspective and really fought for the right things. While GM & Chrysler are cutting back on new product, Ford is accelerating. While GM & Chry are praying for hybrids and batteries and new technology, Ford has a laser beam focus on bringing European small cars to the US market and putting proven simple cheap turbo direct injection engines in all of their larger vehicles (20% increase in fuel economy).
    And the results are already coming in: Honda and Ford had a 31% reduction in sales this month. Toyota saw 34% reduction. GM & Chrysler saw “over 40%” reduction! Ford’s hanging with the well run companies. They’re quality rankings have increase across the board. They’re done closing plants, God willing, at least according to current plans. They were profitable 1st Quarter of this year, before the new union contract kicks in, before their new products come online.
    There isn’t a wink when Ford asks for $9-billion in loan guarantees. There’s a plan that’s working if things don’t get worse. The other guys don’t pass that test.

  2. Jon

    December 3, 2008 - 3:01 pm

    I agree with you about Ford, Andy. Mulally has been doing the best job of the 3 CEOs. That’s why his response to the question of his salary was disappointing. It’s too bad that the three have been lumped together in asking for bailouts. Their situations are not at all of equal merit.

  3. kubi

    December 29, 2008 - 1:38 am

    Jon I have have follow through your trip, I am so excited by your findings.When I read about GM, Chry and Ford, Jon I am really not understanding ‘what is not happening’…
    What happen to Ford? if you could put us through the genesis, it might be a good learning for many of us leading KAIZEN activities elsewhere!

  4. Jon Miller

    December 30, 2008 - 2:22 am

    Hi Kubi,
    It is more a combination of “Exodus” and “Revelations” than “Genesis”, if you will excuse the pun.
    You can learn a lot about what went wrong at General Motors by reading The Rebirth of American Industry from Bill Waddell. Chrysler has failed once or twice already, depending on what you think of the Daimler-Chrysler years. Ford has in fact been doing many things right and it will be a shame if they cannot see their efforts through. They are the one car company the U.S. government should bail out.
    History books will write the full details, troubled labor-management conflicts, a captive domestic market that allowed the big 3 to be make money in spite of themselves for decades, and a total lack of meaningful U.S. industrial policy, when compared to Japan or even many developing countries are some of the factors. Of course it’s hard to fault the big 3 for being focused on customer. The U.S. consumer apparently loved the big trucks, until fuel prices drove them away and the big 3 had no other profitable small vehicle platforms. Sometimes the customer is wrong…
    Failure is complex, while success is simple. Study success and copy it diligently.

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