CEOs of 'Big 3' fine-tune strategies for Congresional aid

01 December 2008

The Detroit automakers have been lumped together for decades as the Big Three, and for good reason; their goals have usually been aligned. But this week, as the automakers take a second run at the US Congress, hoping to persuade lawmakers to give them $25 billion in federal aid, their agendas are diverging as they contemplate futures as drastically different car companies.

Those differences will become clear as they deliver more detailed plans for how they would use that money not just to survive, but also to turn themselves around to be competitive in the long term. That should make for a sharp contrast to the hearings two weeks ago, when the executives presented a united front, saying in unison that it was the credit crisis and weak economy, not their strategies that had put them in dire straits.

GM CEO Rick Wagoner, Ford CEO Alan Mulally and Chrysler CEO Robert Nardelli will put their jobs on the line this week when they try to convince Congress they can save their companies.

They have already been criticised by lawmakers of being unprepared after two days of Congressional hearings failed to convince lawmakers the automakers should get $25 billion to avoid an industry collapse. Congress ordered that new plans be presented tomorrow.

Wagoner, head of the biggest US automaker and the executive with the longest tenure of the three executives, has borne the brunt of criticism. (See: No bailout yet for Detroit Big Three)

GM's board met on Sunday to review a restructuring plan intended to cut costs and win support for up to $12 billion in emergency funding from the government. A GM spokesman said the automaker does not comment on board meetings as a matter of policy. "We are moving ahead toward delivering the plan," GM spokesman Tom Wilkinson said.

GM wants to cut debt - probably through an exchange with current debt holders - and change union rules that pay workers when their plants are closed as part of an effort to ensure its future viability, people familiar with the plan said last week. The largest US automaker also may ask to delay a $7 billion payment to a union retiree health-care fund and drop more brands, said the people.