Dear Messrs. Mulally, Nardelli, Wagoner and Gettelfinger: The popular reality program "The Biggest Loser" pits obese people against each other in a competition to see who can lose the most weight. Sound familiar? You, Detroit's Big Three automakers, are obese companies that need to drop the excesses weighing you down. You can't compete with foreign auto companies doing business in the U.S. and abroad. Each of you has an issue that should infuriate every taxpayer. On top of that, the United Auto Workers, the union representing your employees, has only exacerbated your problems.
Ford (F)Mr. Mulally, as Ford's CEO you are asking for a $9 billion line of credit ... "just in case." You have testified under oath that you really don't need that money but want it just in case one of the other automakers goes belly up. That would help your business sell more cars, right? With all due respect, good-bye. No money for you!
ChryslerA few years ago, you, Chrysler, decided to get into bed with Cerberus Capital. Cerberus thought it would make a killing by changing your management and business plan. Cerebus took you off the market so that it could get all the profits. It didn't want to merely invest in Chrysler alongside us, regular Americans. Cerebus wanted it all. Greed got the best of Cerebus, and it bought a lemon. Sorry, Cerebus and Mr. Nardelli: You wanted all the profits, now you get all the losses. No money for you! GM ( GM) All I can say about GM is that you, Mr. Wagoner, have been asleep at the wheel. You should have been selling or closing units to raise money long ago. There is no reason to hang on to Saturn, Pontiac or Hummer. Keep on making Cadillac, Chevy and Buick. (We hear Buick is popular and profitable throughout Asia.) And what the heck took you so long to move on the Chevy Volt (hybrid/electric)? That car unfortunately will never see the light of day under the GM logo. Mr. Wagoner, you were slow to change, and we don't feel responsible for your errors in judgement. Sorry, no money for you!
UAWMr Gettelfinger, you, sir, should be ashamed of yourself. I spend most of the day on TV talking about the demise of the U.S. auto industry. I am bombarded with emails and calls from Americans who are disgusted with the industry's situation. Most don't want to bail your business out with taxpayer money, but all want to know where ground zero is. I can only blame you, sir. Your union is the reason why the cost-per-vehicle for Detroit's Big Three is significantly higher than that of foreign companies (BMW, for example) building cars here with American workers. Your "legacy" costs burden Ford, GM and Chrysler so much that the following is true, according to S&P.
Profits per Employee
- Audi: $56,471 profit
- Toyota (TM): $38,645 profit
- Honda Motor (HMC): $29,840 profit
- BMW: $29,810 profit
- Nissan (NSANY): $22,555 profit
- Ford: ($46,841) loss
- GM: (90,444) loss