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By Root 906 0

about our business and cared even less was the price they had to pay for a minimum infusion of federal cash.The visible cause célèbre triggering the avalanche of congressional indignation was the use by the CEOs of their company jets to come to Washington, D.C.I won’t go into a defense of corporate jets here, but I do believe that maximum mobility for the most senior people in a global company is essential. Having said that, I will point out that, upon discovering the corporate jet use, the noble congressmen, well-known for their unwillingness to accept favors and perks, were fuming with righteous wrath. How could these fat-cat CEOs have wasted money flying to D.C. by G-5 when they could have flown Northwest? The now defunct—or, rather, corporately absorbed—Northwest happened to be notorious for its unreliable schedule. (A favorite practice was to cancel half-full flights for “mechanical problems” and consolidate them with a later flight to the same destination, but now with a much better load factor. The number of international connections out of New York and Boston I have missed due to this practice is astounding. “What is there about the words ‘scheduled flight’ that you folks don’t grasp?” is a question I frequently asked of Northwest’s terminally surly counter personnel.)

Imagine, if you will, what could have happened if the three CEOs had been on a cancelled Northwest flight and missed the hearings. Our elected officials would have been apoplectic with rage! “These insolent CEOs don’t place enough priority on congressional hearings to use their safe, secure, and reliable jets,” they would declare. “Instead, in a grandstanding, penny-pinching move, they placed their fate in the hands of an airline known for its numerous cancellations. Ladies and gentlemen, citizens of this grand land of ours, I hope you share my outrage over their failure to appear due to their cavalier attitude toward Congress, the representatives of the American people . . . blah, blah, blah!” The three CEOs were wrong no matter how they might have traveled to D.C.

I have a feeling that, after the first unjust humiliation, Alan Mulally of Ford told himself, “I don’t need this,” and asked his finance people if they were sure Ford couldn’t squeak through without government money. Turns out, in their case, they could. A year earlier, Ford, after years of financial stress, had essentially mortgaged every hard and soft asset in the company, including the iconic Ford Blue Oval logo, for north of $30 billion. We, at GM, thought that rather odd at the time: why would anyone want to securitize the whole company when, say, $15 billion in cash should be enough to get through any reasonably foreseeable downturn?

Maybe Ford knew something that we didn’t. Maybe they had a crystal ball. Maybe (my theory) it was dumb luck (which is, actually, the best strategy of all).

At any rate, in the months post-financial-meltdown and postfuel-price-doubling, when all auto companies, foreign and domestic, saw sales decline by 40 to 50 percent, cash was pouring out of the large companies at about the same rate, roughly $5 billion per quarter, whether at Toyota, Ford, or GM. Simple math dictates that, at that rate, the tank at GM would be empty in three quarters, and it was.

Ford, starting with about twice our cash pile, could last six quarters, which was enough to get them through the worst. Toyota, with cash estimated at $100 billion, barely felt it, although the company slipped into severe losses for the first time in its long history. (Today, Ford is the darling of the conservatives, the plucky, brave American company that stood on its own two feet and refused federal assistance.The company has been wallowing joyfully in those accolades ever since, and the goodwill it has brought them vis-à-vis “Government Motors” has benefited their sales way beyond that merited by their admittedly decent product lineup. Whether by luck, chutzpah, or skill, Ford is the new darling of the nation, somewhat replacing the recently fallen idol, Toyota. But GM will get over it!)

Before the