A Plan to Save GM

So, I have been discussing why I don't think GM and Chrysler deserve a bailout or loan. Well, I was thinking tonight and I came up with a plan to help GM without needing government to do anything (other than doing like usual and ignoring stock legal issues). And yes, GM is the one I thought of because Ford doesn't need help and Chrysler should still be considered German.

Okay, here we go. First, assume I was a Representative or Senator. (Mainly this is because it would take a member of Congress doing something other than spending tax money to get this started.) Now, as a Congressman, I would have a voice to be heard nationally. So how would I help GM?

Well, I would hold a charity event. Yep, you heard right. All I would do is replicate the money raising events used by Presidential candidates. That could raise some money, but I would also add a few wrinkles (another reason I focused on GM).

First, I would get GM to sell treasury stock for a donation. (For those who don't know, treasury stock is authorized stock owned by the company so when companies by their own stock, that is what the bought shares become.) However, instead of selling it for current price, I would pick some number, $50 or $100 or even much more, that would go to the company. As GM is around $4 now, that is quite a premium. While this would dilute current shareholders, I think this situation would be acceptable for them.

Second, I would either auction off or take orders for special GM vehicles. Have you heard of the new Chevy Volt? The new electric car from Chevy would be the basis for this. At the moment, they haven't gotten this sucker in mass-production, but that isn't an issue. What I would do is find out how much it costs to make it, understanding that there are essentially no labor costs. Now, adding on a healthy "donation" premium, I would have GM either auction off a couple specially produced cars or take orders and sell them, just like an author producing 100 copies of a signed book to auction. To help GM out, I would also suggest they design and specialty build an electric version of a couple other cars, e.g. Hummer or Buick. (This is not to detract from the Chevy Volt but to create even more personalized type vehicles to raise even more money.)

Now, sure, this wouldn't make billions of dollars, but so what? Remember, the whole point is to create a buzz and get at least some cash. Plus, by forcing GM to quickly make Volts, it increases the learning experience they get. Plus, the different brands are an opportunity to think about expanding the electric car lines, giving a leg up when it comes to mass producing different versions.

Now, the only issue with this plan would be the federal government. Yep, this idea definitely breaks a few regulations. However, I would not have a problem with the government choosing to look the other way. Why? Well, if they are going to break the law by giving automakers taxpayer funds, wouldn't it just be easier to ask for a Presidential pardon and avoid the mess? No laws broken, no real dangerous precedents.

The whole point of this scenario is to demonstrate how an outside thinker can find ways to solve problems without instantly jumping to "just give them money." So, how do you think this would work? Leave a comment with any suggestions or any other ideas you may have.