The first of the Big 3 proposals on how to turn their businesses around is in and Ford – the strongest of the three companies – says it may be able to go it alone. Barring the bankruptcy of one of the other automakers – a really big if – Ford tells Congress it likely wouldn’t need to tap the $9 billion bridge loan it’s asking be held in reserve through next year and expects to return to profitability by 2011.
The other two plans have yet to be released but my old friend Jeff Green at Bloomberg News reports that GM will tell Congress that it plans to cut debt, consider which U.S. brands to sell (Buick, Saab, Saturn, Hummer and Pontiac) and CEO Rick Wagoner will work for $1 a year (a pledge also made by Ford CEO Alan Mulally if Ford is forced to tap the bridge loan; Chrysler CEO Robert Nardelli told the House Banking Committee last month that he would accept a $1 salary). Nothing yet from Chrysler, but the other plans are expected to be released by the end of the day and I will update as they come in.
As Scherer wrote this morning, at least one of the CEOs is driving to DC from Detroit and the other two are eschewing company jets (both GM and Ford have announced plans to sell several corporate aircraft). Much of this week will be an exercise in public relations: convincing Congress and the American people that they need and deserve these loans and that they won’t squander the funds. So far, the markets, at least, seem to like Ford and GM’s plans – both stocks gained 30 cents a piece in morning trading.
Here’s the link to GM’s plan.
Here’s the link to Chrysler’s plan.