Big 3 CEOs Give It Another Go

It looks like a harsh dose of reality and a much needed lesson in humility changed the tune of the Big 3 CEOs.

I just watched Chrysler CEO Bob Nardelli speaking before his new day in front of the Senate Banking Committee.  He said, “I can tell you in my 38 years in business, I’ve never attended a more important session.”  The man has a point.

At his last Capitol Hill appearance, Mr. Nardelli and the other American automaker CEOs were basically scolded and laughed out of town.  I suggested that next time the Big 3 CEOs show up in a company car instead of flying in on private jets.  It looks like they got my memo and took my advice!

This morning, each CEO arrived in an environmentally friendly company car after making the drive from Detroit to Washington, DC.  I think it would have been enough to fly Southwest and have a company car take me from the airport to Capitol Hill, but these guys are pouring it on thick!

Should today’s flash of humility hold any weight with our legislators?  It should be noted that Nardelli agreed to accept a $1 salary should his company receive federal assistance and the others will take pay cuts as well.  It should also be noted that the bailout request has risen from $25 billion to $34 billion.

No one wants to make a loan knowing that it will not be repaid, so I hope that the execs came with a detailed plan as to how they will use and repay this $34 billion.  After watching Treasury Secretary Hank Paulson basically demand a blank check for 28 times the size of the automakers’ initial request, maybe they figured it was okay to skimp on the details in their first go around.  

Previous bailout conditions aside, the onus is on the borrower.  When you want a loan you have to prove to a lender that you can satisfy their requirements.  When you are a lender you ought to have a set of standard requirements. 

I wonder if the automakers feel the public hoops they are being forced to jump through are unfair.  I sincerely hope not. Talk to a small business owner trying to get a $10,000 loan and then we can talk about hoops.