General Motors and the rest of the American automakers have been screaming for a cash tourniquet for some time. GM’s February viability plan noted that the cash-starved car maker needed 2 billion dollars in March and 2.6B in April; GM has already received 13.4B and has gone on record that it will need another 16B+ to stay afloat. That’s not news, but what happened today certainly was.
GM reported to the US Government that it didn’t need the March amount of 2 billion dollars because its “cost-cutting measures were working”. Well, that’s all commendable and everything, but whaaaaaat?? This doesn’t make sense to me.
Why? It almost makes sense if GM claims to need 13.4 billion and then says, “Ummm…that’s not enough…we need more….lots more.” Even if doing so shows complete incompetence in forecasting. However, if right after that they say “Oh, we’re good for now!”, how does this not reek of “The Boy Who Cried Wolf”? I mean, come on, let’s think about this in an analogy. Say a person comes up and tells you, “I have to eat that steak or else I am going to die of hunger!” Because you don’t want someone to die, you give up your steak to them; the thought is that they’ll eat it and be able to live. Then the person comes back later and says “I SO need another steak every month or else I won’t be able to go on living!” You would probably then try to help them out by saving a steak for them, right? (Stay with me here)
Suddenly the person tells you something different: “Umm, I don’t need that steak now, I was actually able to eat a few crackers I had in my pantry and I am fine for a while.” What would that say to you? Because I know what it would say to me! Let’s discuss…
A) This person never was dying of hunger in the first place.
B) If they were able to suddenly survive on crackers, why couldn’t they have done that before?
C) I want my darn steak back!
D) The next time that dude asks me for a steak, I sure as heck am going to check his pantry for crackers again.
Bottom line, for GM to cry foul for so long, “need” so much money, and then say “Oh, we don’t need it this go-round after all” does not speak of nobility nor responsibility. This feels more like a cold, calculated move to ask for more than is required initially, then turn down funds periodically to boost consumer confidence and stock prices. Obviously, this is NOT the case if simple cost-cutting measures negating GM’s need for two billion.
When are we going to stop blindly nodding to gaudy numbers? When is someone going to open up these bozo’s books? If there’s something to be said about this roller coaster situation, it’s that the “car czar” idea is one of the more lucid ideas we absolutely must see take place.
Now I’m all verklempt….