Now, it seems that Goldman Sachs has stated that the effect of letting these three car monsters fall into bankruptcy would be a $1 trillion setback. If that number is even half right, then let’s get them the needed money now. But, hold the horses. Do not print that up just yet. Let’s take a look at the holes in this deal that have already surfaced.

I have been in the finance industry since I was 20. I have spent more than 2 decades in and around the credit side of the business. The majority of my time has been spent as a Credit Manager, so when I see these things, it makes me take a step back. At this point, I have spotted 2 big flaws with the plan from the man to get Congress to bite.

The first flaw is a big one. Typically, when a company is in trouble and looking for help, they do things in good faith. In this case, the CEOs are putting these things in their proposal as “bait”. They are now stating that “IF” Congress gives them the money to get out of this bind, then they will agree to cut their salaries to $1 a year. While this is admirable, it would have meant more if they came to Washington with that reduction already in place. This is referred to as a “Good Faith Payment” on their part. Instead, they want to dangle it in front of Congress as an enticement.

The second flaw is the fact that 2 out of three companies have agreed to sell the “Corporate Jets” in order to help the company. While this too is admirable, the jets are not what is driving the companies into bankruptcy. The biggest issues that I see at hand are having products that are not top selling products. In cases like this, cutting the fat is what would be best. Selling off bits and pieces of the companies would be one way to gain stability in a shaky economy. Slowing down production or laying off people might seem like a likely factor in a time like this, but I do not think that is the answer. If you reallocate these workers and cross train them, then I think that you can retain a majority of the work force instead of adding to unemployment.