'This Is the Big Correction'

" What we feel pretty good about the second half of the year on top -- GM executive commenting moments ago on what otherwise look like some lousy sales last month. Down nearly 30% of the now bankrupt -- giant. But some expect even warrants a lot -- GM vice chairman. Bob Lutz convinced things will get only better run a very good to have you thanks for coming. Thanks for thanks for having me. I'm let me ask you about that we -- we won't I guess -- finance committee mildly surprised cells weren't worse but they. We're pretty bad for GM they they were pretty bad for pretty much all the auto guys -- a difference here. -- you're encouraged --"

" Well because I'm encouraged because we are going through this cleansing reorganization process which is going to leave as as a much. Leaner Trimmer GM. Without food without the things that drag this down before. It wasn't the lack of sales that drag this down because as you point out everybody is down about the same amount. What went finally. Cause the collapse of of the old -- him. Was these monumental legacy costs -- huge health care obligations to retirees the debt servicing obligations. Why in the last fifteen years we have spent. A 103. Billion dollars on health care and retiree health care and I know your previous guest. Argued vehemently for the present private system. But I'll tell you this is the only country in the work in the industrialized world. Where the manufacturing companies have to pay for the health care of their workers and their retirees the Japanese built the Koreans -- the Chinese -- the Germans don't."

" So you're you're argue that's -- that puts at a competitive advantage about I mean I know the unions made progress trying to get some of those -- on the sides of the rap against this agreement. Is they didn't get a not a size and knobs and the bond holders and investors. Gave up more skin in the game than they did what do you make of."

" Well and look good -- the deal is the deal that their shareholders in in any chapter eleven the shareholders. Wind up getting nothing at all. That's that's just the way it works executive pay of -- The UAW has given up on some some pay and benefits and work practices the UAW has agreed. To the closure of a large number of manufacturing facilities -- to a reduction in in hourly labor. So everybody has had to. Come to the party on this because we were simply. I would argue as a nation but certainly as an industry we were living beyond our means and this is this is the big correction and -- go through chapter eleven and then we'll take off."

" From there let me ask you about this that do you think especially upon hearing today that the homers going to be sold to a Chinese concerns. That had taxpayers known in advance. That -- Chinese company was going to buy an American icon. And furthermore. Bankruptcy that would have never been entertained a few months ago. Would be freely entertain now the GM would have gone so much as of dying from taxpayers."

" Well and we know it's it's sorted with the Bush Administration when it was -- whether it was obvious that the American automobile industry was in a great deal of difficulty and would need some financial assistance. And we believe that the process started under the Bush Administration. And we knew that -- the Obama administration would finish the process -- The only choice here would have been to practically let the whole automobile and the whole American automobile business and supplier industry. Basically fail. And I I have to tell you from -- national economy and national health standpoint I don't think we -- wanted to do."

" Well no I can Syria -- wearing your car veteran -- Odyssey would not have wanted -- saying bankruptcy then or now but. Where there are now when we could've done then I guess -- we can argue whether timing was everything let me ask you this Obama it. President Obama has made it very clear that now that the government has a 60% stake in the new GM or whatever will evolve as a new GM. That does not mean he's going to be snooping around in dictating. Policy or even car models but he has been very strong on the types of cars. He'd like to see this is from President Obama over these many months you know literally thrilled I --"

" Japanese can design a affordable well designed hybrid. Then doggone it the American people should be able do the same. We need to raise fuel economy standards. Put plug in hybrids on the road future's going to be in fuel efficient cars it's going to be in -- plug in hybrids. What is wrong well look."

" That -- have I know he says -- in the speech. With all due respect I would say is wildly misinformed -- that. General Motors -- a lot of hybrid vehicles we build the most sophisticated hybrid system in the world it's called. The two mode hybrid system which permits are full size trucks and sport utilities to get. Astonishing mileage of the world's the world's best mileage of any sport utility of that kind. -- when he says the Japanese can build. Fuel efficient vehicles -- okay so can we in many categories. Are vehicles are better than the Japanese on fuel efficiency and all -- vehicles. All our vehicles are highly fuel efficient I don't think we have one vehicle left in -- in the lineup. That is not a competitive or better than competitive."

" On fuel welcome the very end -- bonds yeah you you've been on the vanguard of a lot of these a new wave technologies including what's going to be. Maybe it's a crucial one for GM that this -- but let me ask you though you know when I -- of Fritz Henderson yesterday that the CEO. And I asked him if you're now running the show but you've got to sort of test -- to deal with and you see is GM is back on its feet. That certain of these models that the president really wants you to sell aren't selling and the American people aren't behind them. And that yeah they do light green technology but they still like their big vehicles. Are you going to be able to tell the president no -- qaeda's do you think yes he can do you think reprisals -- all right."

" No listen the only you got to listen to me. -- the automotive task force which is in charge of this thing and with whom I've talked at great length. They want us to meet the law -- the 35 35 mile per gallon mileage mandates and we know we can do that right and we got a very reasonable deal on that partially because of the good dialogue between us and the government. And they want us to meet safety regulations on crash and roof crush in rollover and -- that's open will do that little. So as long as we meet the nation's laws which are applicable to everybody. We will continue and abide by the way we're encouraged by the government. To continue building a large array of vehicles some of -- highly fuel official."

" I'm glad they only wanted a high level if they want only the Highlander movies they want -- small cars you know what I'm saying. Digital lived in this do you have that puts but it come back and -- now we're that's not settlement. -- But when you can't have one law that applies to General Motors and another law that applies to everybody else and."

" We -- to -- 35 miles per gallon right with a wide array of vehicles we're going to continue doing -- we're going to continue doing -- will continue to do full size sport utility by the -- the most fuel -- whoever -- to do real -- task -- No you're wrong on this you know I'd I'd tell you have I collected the -- desperate to talk to Harry Wilson very reasonable will educated sounded individual are all his whole mandate is non ideological. Appeal doesn't want us to go super agreement lose money -- wants General Motors successful -- I -- he's being measured by -- that's always a pleasure thank you very much. Thanks very -- I feel are."