GM Gets on its Knees and Begs

Self-flaggelative PR - GM's letter to America, published in Automative News and syndicated 'round the major newspapers.

From the site for GM to 'tell it like it is' on the current crisis: http://gmfactsandfiction.com

Did the banks ever write me an apology?

----December 8 2008

We deeply appreciate Congress considering General Motors’request to borrow up to $18 billion from the United States. We wantto be sure the American people know why we need a loan, whatwe will do with your money and how it will make GM viable for thelong term.

For more than 100 years, we have been serving your personalmobility needs, providing American jobs and serving localcommunities. We have been the U.S. sales leader for 76 consecutiveyears. Of the 250 million cars and trucks on U.S. roads today, morethan 66 million are GM brands — nearly 44 million more than Toyotabrands. We value your business and appreciate the confidenceyou have in our products. Our goal is to continue to fulfill youraspirations and exceed your expectations.

While we’re still the U.S. sales leader, we acknowledge we havedisappointed you. At times we violated your trust by letting ourquality fall below industry standards and our designs becomelackluster. We proliferated our brands and dealer network tothe point where we lost adequate focus on our core U.S. market.We also biased our product mix toward pickup trucks and SUVs.And we made commitments to compensation plans that haveproven to be unsustainable in today’s globally competitive industry.We have paid dearly for these decisions, learned from themand 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; ournewest designs are widely heralded for their appeal, such asthe Chevrolet Malibu and Cadillac CTS; our new products arenearly all cars and crossovers rather than pickups and SUVs; ourmanufacturing operations have greatly improved productivity, andour labor agreements are much more competitive.

GM is also driven to lead in fuel economy — with more hybridmodels for sale and biofuel-capable vehicles on the road than anyother manufacturer — and is determined to reinvent the automobilewith revolutionary new products like the Chevrolet Volt* extendedrangeelectric vehicle and breakthrough technology like hydrogenfuel cells.

Until recent events, we felt the actions we’d been taking positionedus for a bright future. Just a year ago, after we reached transformationalagreements with our unions, industry analysts were forecasting apositive GM turnaround and our stock price reflected that confidence.We had adequate cash on hand to continue our restructuring evenunder relatively conservative industry sales volume assumptions.Unfortunately, along with all Americans, we were hit by a“perfect storm.” Over the past year, all of us have had to deal withvolatile energy prices, the collapse of the U.S. housing market,failing financial institutions, a stock market crash and the completefreezing of credit. We are in the midst of the worst economic crisissince the Great Depression.

Just like you, we have been severely impacted by events outsideour control. U.S. auto industry sales have fallen to their lowest percapita rate in half a century. Despite moving quickly to reduce ourplanned spending by over $20 billion, GM finds itself precariouslyand frighteningly close to running out of cash.

We know some Americans have questioned why the FederalGovernment should assist the auto industry, specifically when somany other sectors of the economy appear to be at serious risktoo. The answer is because we have already lost a number ofindustries that spin raw materials into finished products that can bepurchased by the citizens of this nation and, just as importantly,those of other nations.

A healthy manufacturing base generating exports is critical tothe economy and national security of the United States. The autoindustry is the backbone of this country’s manufacturing base.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 ouroperations and invest in important advanced technology. A collapseof GM and the domestic auto industry will accelerate the downwardspiral of an already anemic U.S. economy. This will be devastatingto all Americans, not just GM stakeholders, because it would putmillions of U.S. jobs at risk and further deepen our recession, a crisisthat would not merely be localized to the Midwest.

By lending GM money, you will provide us with a financialbridge until the U.S. economy and auto sales return to modestlyhealthy levels. This will allow us to keep operating and completeour restructuring.

We submitted a plan to Congress on December 2, 2008, detailingour commitments to ensure our viability, strengthen our competitivenessand deliver energy-efficient products.

GM’S COMMITMENT TO THE AMERICAN PEOPLESpecifically, we are committed to:

• producing automobiles you want to buy and are excited to own• leading the reinvention of the automobile based on promising new technology• focusing on our core brands to consistently deliver on their promises• streamlining our dealer network to ensure the best sales and service• ensuring sacrifices are shared by all GM stakeholders• meeting appropriate standards for executive pay and corporate governance• working with our unions to quickly realize competitive wages and benefits• reducing U.S. dependence on imported oil• protecting our environment• paying 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 will create high quality jobs forthe “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 duringour next 100 years.

*Chevy Volt Target Launch: 2010