The Big 3 are back on Capitol Hill today, making their case again for access to taxpayer funding. There are likely to be many ridiculous statements made, but even this crew will have trouble matching George Fisher, G.M.'s leading outside director. Here's what I read in my local paper yesterday:
Fisher said that GM's 13 outside directors were in agreement with the automaker's chairman, Rick Wagoner, that bankruptcy would ruin the company's reputation.
"We are pretty convinced as to the serious damage to the brand from bankruptcy," he said. "We do not consider it to be a viable approach."
Fisher, the retired chairman of the Eastman Kodak Company, said the GM board would confront the possibility of a bankruptcy filing only if Congress turned down a loan package for GM, the Ford Motor Company and Chrysler.
"We're not going into this thinking we are going to lose," he said. "That would be a disaster. If you think you're going to lose, you will."
But he said that GM, which has lost more than $20 billion this year, could not keep operating without government help.
Let's ignore the obvious question of why a government would want to help keep a company that lost $20 billion this year operating. Let's instead consider this phrase, "serious damage to the brand from bankruptcy." I certainly agree that the brand is not helped by filing for bankruptcy. (Though it is also worth pointing out that it is not helped by begging for money from the government, either.) But these are side issues, and the damage done to the brand from this episode could be repaired.
I remember the cars that the extended Samwick family (parents plus grandparents) owned in my childhood. At one point, there were five cars three from Ford, two from GM. One of those GM cars was a Buick Riviera. Mr. Fisher, that Buick Riviera, plus the local dealer's inability to service it and stand behind it, is what did serious damage to your brand. After that, my parents bought a Datsun, and then another Nissan to replace the Ford, and then never another American-made car again. And their son followed suit. The damage done to the brand by years of substandard products is something that cannot be repaired so easily.
I suspect that the Samwick family story is not unique. If it were, then Mr. Fisher's colleagues wouldn't be panhandling the Senate today. The Senate should take Mr. Fisher at his word, deny the additional loan requests, and let the companies file for bankruptcy.