The Last GM Makeover Attempt Didn't Go So Well

The Big Three CEOs have arrived in Washington to ask for a reported $34 billion bailout, presenting viability plans for using that money. But the viability plans are the subjects of heavy media and public skepticism. The New York Times reported today that GM's Saturn brand represented a failed makeover:

General Motors has promised Congress that it can recreate itself as a different kind of car company -- smaller, with a more cooperative relationship with its union, and a lineup of fuel-efficient cars to compete with the best of the foreign brands.

At least G.M. knows how difficult the challenge will be.

A quarter-century ago, G.M. started Project Saturn with the same goals. And it worked, for a time. Saturn owners, including many who traded in their Hondas and Toyotas to own the first models in 1990, became cheerleaders for the division's customer-friendly approach, while the United Automobile Workers union gave up many of its traditional restrictions to help Saturn succeed.

Memories of that makeover attempt cold be churning the stomachs of the CEOs as they ask Congress for money they say is urgent. But the urgent need for money now leads some to believe that the automakers' bankruptcy is imminent:

The news shows that there is a growing admission that putting $20 billion or $30 billion into car firm rescues won't cut it.

According to Bloomberg, "General Motors Corp. and Chrysler LLC executives are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multibillion-dollar government bailout."

No one should be shocked. The two companies say they need money in the next three weeks to stay in business. Getting any closer to a Chapter 11 filing or a Chapter 7 liquidation would be impossible.