• Dec 8, 2008
The last few weeks may have been some of the worst in GM's 100-year history. Sales have tanked, CEO Rick Wagoner faced a firing squad in Washington -- twice -- and a CNN poll showed that 61% of Americans didn't want the automakers to get federal loans. It appears Congress is on the verge of approving up to $18 billion dollars to keep GM and Chrysler in business, and the General is thankful for the chance to keep the lights on. GM crafted a letter expressing its gratitude, and published it in today's Automotive News.
In the two-page letter, available on the GM Facts and Fiction, GM admits that it has made mistakes. Among the list of items the General is asking forgiveness for are slips in quality, over-reliance on trucks and SUVs, and lackluster designs. GM also pointed out several steps to return to profitability, including streamlining its dealer network, advancing automotive technology, focus on core brands, and perhaps most importantly, build cars that Americans want to buy. Read the letter for yourself after the jump and let us know what you think in the comments.

[Source: GM Facts]

GM'S COMMITMENT TO THE AMERICAN PEOPLE

We deeply appreciate the Congress considering General Motors' request to borrow up to $18 billion from the United States. We want to be sure the American people know why we need it, what we'll do with it and how it will make GM viable for the long term.

For a century, we have been serving your personal mobility needs, providing American jobs and serving local communities. We have been the U.S. sales leader for 76 consecutive years. Of the 250 million cars and trucks on U.S. roads today, more than 66 million are GM brands - nearly 44 million more than Toyota brands. Our goal is to continue to fulfill your aspirations and exceed your expectations.

While we're still the U.S. sales leader, we acknowledge we have disappointed you. At times we violated your trust by letting our quality fall below industry standards and our designs become lackluster. We have proliferated our brands and dealer network to the point where we lost adequate focus on our core U.S. market. We also biased our product mix toward pick-up trucks and SUVs. And, we made commitments to compensation plans that have proven to be unsustainable in today's globally competitive industry. We have paid dearly for these decisions, learned from them and are working hard to correct them by restructuring our U.S. business to be viable for the long term.

Today, we have substantially overcome our quality gap; our newest designs like the Chevrolet Malibu and Cadillac CTS are widely heralded for their appeal; our new products are nearly all cars and "crossovers" rather than pick-ups and SUVs; our factories have greatly improved productivity and our labor agreements are much more competitive. We are also driven to lead in fuel economy, with more hybrid models for sale and biofuel-capable vehicles on the road than any other manufacturer, and determined to reinvent the automobile with products like the Chevrolet Volt extended-range electric vehicle and breakthrough technology like hydrogen fuel cells.

Until recent events, we felt the actions we'd been taking positioned us for a bright future. Just a year ago, after we reached transformational agreements with our unions, industry analysts were forecasting a positive GM turnaround. We had adequate cash on hand to continue our restructuring even under relatively conservative industry sales volume assumptions. Unfortunately, along with all Americans, we were hit by a "perfect storm." Over the past year we have all faced volatile energy prices, the collapse of the U.S. housing market, failing financial institutions, a stock market crash and the complete freezing of credit. We are in the midst of the worst economic crisis since the Great Depression. Just like you, we have been severely impacted by events outside our control. U.S. auto industry sales have fallen to their lowest per capita rate in half a century. Despite moving quickly to reduce our planned spending by over $20 billion, GM finds itself precariously and frighteningly close to running out of cash.

This is why we need to borrow money from U.S. taxpayers. If we run out of cash, we will be unable to pay our bills, sustain our operations and invest in advanced technology.

A collapse of GM and the domestic auto industry will accelerate the downward spiral of an already anemic U.S. economy. This will be devastating to all Americans, not just GM stakeholders, because it would put millions of jobs at risk and deepen our recession. By lending GM money, you will provide us with a financial bridge until the U.S. economy and auto sales return to modestly healthy levels. This will allow us to keep operating and complete our restructuring.

We submitted a plan to Congress Dec. 2, 2008, detailing our commitments to ensure our viability, strengthen our competitiveness, and deliver energy-efficient products. Specifically, we are committed to:

  • produce automobiles you want to buy and are excited to own
  • lead the reinvention of the automobile based on promising new technology
  • focus on our core brands to consistently deliver on their promises
  • streamline our dealer network to ensure the best sales and service
  • ensure sacrifices are shared by all GM stakeholders
  • meet appropriate standards for executive pay and corporate governance
  • work with our unions to quickly realize competitive wages and benefits
  • reduce U.S. dependence on imported oil
  • protect our environment
  • pay you back the entire loan with appropriate oversight and returns

These actions, combined with a modest rebound of the U.S. economy, should allow us to begin repaying you in 2011.

In summary, our plan is designed to provide a secure return on your investment in GM's future. We accept the conditions of your loan, the commitments of our plan, and the results needed to transform our business for long-term success. We will contribute to strengthening U.S. energy and environmental security. We will contribute to America's technical and manufacturing know-how and create high quality jobs for the "new economy." And, we will continue to deliver personal mobility freedom to Americans using the most advanced transportation solutions. We are proud of our century of contribution to U.S. prosperity and look forward to making an equally meaningful contribution during our next 100 years.


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    • 1 Second Ago
  • 62 Comments
      • 6 Years Ago
      Imagine writing a letter to your mortgage company who just bailed you out (because you couldn't pay back your loan) and you started by talking about how successful you 'have been' compared with your neighbors? I don't think they'd be amused.
      Al
      • 6 Years Ago
      GM will blow through that money in no time at all. Wagoner is a blithering idiot who should be fired. He is almost as incompetent as Nardelli of Chrysler, who single-handly destroyed Home Depot before being fired there and moving on to trash Chrysler.

      I like GM's comment: "If we run out of cash, we will be unable to pay our bills, sustain our operations and invest in advanced technology." Gee.......doesn't that sound like the rest of us - so maybe we should all get a bailout from the Feds - just give everyone a $million or so and everything will be wonderful!

      The actions of the Big? Three have at least made one decision for me - my next car will be a Volkswagen!
      • 6 Years Ago
      I jsut dont get it. These multi BILLION dollar companies made their beds, now they should have to sleep in it. Why do WE have to BAIL THEM out?

      www.privacy-tools.at.tc
      • 6 Years Ago
      It is said that the economy will get worse before it gets better. Why would Congress add more to the deficit by funding this seemingly hopeless company?
      • 6 Years Ago
      Until top management is replaced nothing is going to change. The executive bonuses will continue ,and they will all be laughing at the american people. In 3 months they will be asking for more money.When do you think the shareholders are
      going to wake up and make some changes? And a $40,000 electric car called the volt.At this time in our economy who will be able to afford that?
      • 6 Years Ago
      uh, the letter doesn't say getting rid of the UAW....
      • 6 Years Ago
      produce automobiles you want to buy and are excited to own (provided that Uncle Sam lets us and doesn't require us to make crap that nobody wants.)

      lead the reinvention of the automobile based on promising new technology

      focus on our core brands to consistently deliver on their promises (and rebadge the hell out the rest)

      streamline our dealer network to ensure the best sales and service

      ensure sacrifices are shared by all GM stakeholders (and all US taxpayers too ;))

      meet appropriate standards for executive pay and corporate governance (appropriate standards? whatever that means)

      work with our unions to quickly realize competitive wages and benefits (hee hee, we said 'quickly' and 'competive' in a sentance about the UAW).

      reduce U.S. dependence on imported oil, protect our environment (leap tall buildings in a single bound)

      pay you back the entire loan with appropriate oversight and returns (er, um, right after we start actually making a profit)
      • 6 Years Ago
      Looks like GM unleashed the social media hounds on the comments page. Good job guys, way to defend the castle! :-/

      The net-net that the GM pundits need to admit is that this 15b simply isn't enough money to keep them afloat 6 months and that Wagoner has done an ineffective job of turning around the ship.

      So here is why he NEEDS to go. Under his watch GM has:

      -Lost Marketshare
      -Never fixed quality perceptions/gaps
      -Ignored economic changes in consumer behavior

      There should definitely be significant concessions/commitments from GM contingent of them getting their loan. I think it's unrealistic to think Wagoner would trade his job for the loan but he could make good on building a more agile company. Lose Pontiac, Saturn, Saab, Hummer and make an instant commitment by announcing the death of Hummer on the day the loan is received.

      I'm all for giving GM more loans if they show progress in their concerted effort to change. If they decide to play a game with American Taxpayers and continue to run a loss leader, then I see no reason why they shouldn't go C11.

        • 6 Years Ago
        I think you're on a island. My anecdotal evidence with my 07 Suburban has been one of complete bliss. 51k on the odometer and I have had to do nothing but change the oil/filter. Now that I broke 50k there's some more routine stuff I need to do, but as far as the mechanical condition of the vehicle, Its flawless. My other vehicle is an LT1 Roadmaster Wagon with 190k on it. I've had to repair precious little on that car and I didn't get my first big-ticket repair until 120k, when the water pump decided to start spitting out coolant. I'd call that pretty reliable. Of course the common denominator is big BOF V8, which GM has always done well.
        • 6 Years Ago
        "So here is why he NEEDS to go. Under his watch GM has:

        -Lost Marketshare
        -Never fixed quality perceptions/gaps
        -Ignored economic changes in consumer behavior"

        You are way off. GM's quality and design is better than ever under wagoner. He has also presided over investments in hybrids and fuel saving tech such as 6 speeds and direct injection. He also was in charge when they got big concessions from the union. Most of the losses GM has recorded recently are related to restructuring and buyouts. They did all that to position themselves for success down the road.

        If Wagoner should go then the same should be said for Dodd and most of congress. 61% of Americans say no to a loan and 80% of Americans say congress is incompetent. Why are the standards for Rick so high when Congress has been asleep at the wheel when the financial crisis was forming?
        • 6 Years Ago
        I'm sorry, I'm off?

        Perception IS reality. In fact GM itself has ADMITTED to disappointing consumers in its new advertisement to America. But let's me take you through a brief anecdotal history between my family and GM vehicles:

        1993 Pontiac Grand Am - Transmission destroyed at 65,000 miles
        1994 Pontiac Grand Prix - Transmission ruined at 77,000 miles
        1998 Pontiac Grand Prix - Transmission ruined at 70,000 miles

        Consolation prize? The dealer promised us a discount on our next Pontiac.

        Fast forward to today.

        2008 Cadillac CTS - Numerous electrical problems, faulty battery, in 12 months of ownership its been in service 4 times.

        I don't think I'm on an island either. Go search blogs on Technorati and/or Google and type in "quality" and any GM brand. See if I'm on an island.

        Direct Injection is great. So are all the green patents GM has filed. I don't care. I look at their vehicle lineup and think "Lumina". It's like a bad taste I'll never get out of my mouth and unfortunately all of this occurred under the watchful eye of one shortsighted Richard Wagoner.
      • 6 Years Ago
      Good stuff, hope to see some great new products on the market soon - it will be nice to have these guys still around. As much as everybody loves to hate the Big 3, the automotive landscape would be a sad place without them.
        • 6 Years Ago
        Yes it will be a sad market if the Big 3 go away for any real car enthusiast especially ones who can't afford cars costing more than $40k. It might be great for econo car loving dorks but sad for real car people. Unfortunately we are outnumbered by the dorks. Sad.

        Fun cars under $40k from the Asian 7(Toyota, Honda, Nissan Mitsu, Subaru, Hyundai, Mazda):
        370z
        Miata(slow but fun)
        RX8 (again slow but fun)
        STi
        Evo
        Speed3
        Pretty sad really only one of those cars is going to offer more than 300hp.

        Big 3 under $40k
        Mustang
        Cobalt SS
        HHR SS
        Sky
        Solstice
        Camaro
        G8
        Charger SRT8
        Challenger SRT8
        300 SRT8


        Let's not even get into vehicles for people who love serious offroading.

        The market will have nothing but crappy econo boxes under $40k because we all know the Europeans won't be able to deliver any of their good cars for the prices the masses can afford.
        • 6 Years Ago
        Sad...no. But we do need healthy and robust competition in all segments.
      • 6 Years Ago
      Hopefully they focus on creating cars that educated people actually want, instead of just selling things to slack jawed yokels in the bible belt.
        • 6 Years Ago
        very, very ignorant...
        • 6 Years Ago
        @Cash,

        I have an MS and I drive a Chevy Suburban and wouldn't even consider a different vehicle. In my experience the most educated people (Ph.D. professors and such) drive old domestic compacts. Saturns and Neons. By "educated" you must mean MBA holding business d******bags, who drive import because they're "too good" to drive a blue-collar American car.
        • 6 Years Ago
        That's just ignorant.
        • 6 Years Ago
        I was just in Philly. I saw a lot of Toyotas, BMWs, Hondas, and VWs. I saw a couple CTSs, not one malibu, aura, or Fusion. I did see a 300 and a few escalades being driven by thugs.

        But that proves my point. EDUCATED people generally don't want anything from detroit.
      • 6 Years Ago
      BTW, those who saying the big 3 should be forced to make fuel efficient vehicles need to note the top sellers in the country are pickups and midsize cars- two segments that they are competitive in mileage. Prius sales are down 10% for the year and 48% last month. Tell congress and the Toyota loving media to catch up to reality. When credit is nonexistent and gas is $1.70 a gallon people are not buying Prius. Fit sales were down as well. Same for YAris. Nissan's small cars arent even worth mentioning.
      • 6 Years Ago
      I'd just like to point out that 61% of Americans did not oppose loans to the auto iindustry. They opposed a "bailout" - something they weren't even asking for.

      Before you reply that they're the same thing, at least half of the people I've talked to about it DON'T understand the difference.

      I'd say there's a huge difference, wouldn't you?

      $700 B to the financial industry without any kind of inquiry or anything at all, no strings attached, compared to 5% of that, with major restrictions and preconditions?

      You can get any results you want in a poll - you just have to ask the questions just right.
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