Wagoner and Nardelli Would Give up Jobs to Save Companies

GM CEO Rick Wagoner and Chrysler CEO Bob Nardelli told Congress today that if giving up their jobs meant saving the companies, they would gladly do it.

Senator Robert Bennett, Republican from Utah, threw out some interesting ideas for the auto industry bailout. Bennett suggested government guaranteed private loans instead of the proposed government-backed loans and wants to see a GM-Chrysler merger. Bennett told Nardelli and Wagoner that he thinks a GM-Chrysler merger would be good for the companies as they “don’t need more loans, they need patient capital.”

In response to Bennett’s push for a GM-Chrysler merger, Nardelli said that the first job to go would be his, but if that’s what it will take to get the necessary loans and save the company he would do it. Wagoner added that he would be open to such an arrangement as well. This comes after all of the Detroit Three CEOs agreed to work for a yearly salary of $1 if the companies get the loans.

For the financial end of the merger, Wagoner and Nardelli said that the merger could save the companies $8 to $10 billion annually. Wagoner told Bennett that the merger wouldn’t generate much funding from the market and what GM needs to focus on now is its short-term cash supply.

As for Bennett’s idea about government guaranteed private loans, the companies would be open to this as they still get the money needed to survive. This comes from the 1979 Chrysler bailout where the government guaranteed $1.5 billion of private loans.