Rick Wagoner cannot afford to leave Washington this week without at least $10 billion in federal aid to keep General Motors in business.
But a major question for Wagoner, GM’s chief executive for the last eight years, is whether he will return to Detroit with his job as well.
While the heads of the Ford Motor Co., Chrysler and the United Automobile Workers are scheduled to also testify before Congress on Tuesday and Wednesday, it is Wagoner and his company that have become the lightning rods of the debate over whether Detroit should get a bailout.
GM, the largest American automaker, is in desperate need of cash to survive the worst vehicle market in the United States in 15 years. Wagoner has, so far, led the industry’s intensive lobbying effort to get federal loans for all three companies.
Like Lee Iacocca, Chrysler’s chief in 1979, Wagoner has the tall task of persuading skeptical Republican lawmakers to back a Democratic plan to save Detroit.
But unlike Iacocca, Wagoner’s 31-year career at GM has not been built on personal charisma and the art of the deal. Instead, he is seen as the leader of a company that has lost $20 billion in the first nine months of this year alone, as its stock price has dropped into the low single-digits from more than $30 a share a year ago.
The company’s cash cushion is shrinking so fast — by more than $2 billion a month — that it has said federal help is needed to keep it from running out of sufficient cash for its operations by the end of the year.
Wagoner has said that despite its perilous financial condition, GM has no plans to file for bankruptcy, or even prepare for the possibility that it may need to seek Chapter 11 protection. But that is the clear threat.
“GM is the biggest of the three, and it’s in the worst shape,” said John Casesa, principal in the auto consulting firm Casesa Shapiro Group. “I think it would be a pretty big blow to Rick if they don’t get the money.”
The debate on Capitol Hill will focus on whether the Detroit automakers can get $25 billion in aid immediately from either the Treasury Department’s $700 billion financial rescue program, or from an existing loan program aimed at improving the fuel-efficiency of Big Three vehicles.
Ford and Chrysler, however, have not made the same dire predictions about their businesses — putting the urgency of the bailout squarely on the shoulders of Wagoner and GM.