The Associated Press reports on Warren Buffett's advice on how the bailout should be structured: "The government should insist top executives at Ford (NYSE: F) General Motors (NYSE: GM) and Chrysler invest a significant percentage of their own net worth in the Detroit-based companies, Buffett said, ensuring both executives and taxpayers would share in any profits or losses."
What a great idea! GM CEO Richard Wagoner and the rest of Detroit's top executives have expressed confidence that any loans would be paid back. Great! So they shouldn't have any problem with investing their entire net worth in the deal -- or at least every dime that they've made running these companies into the ground.
Back in August I wrote about the tiny stake that so many of the decision-makers at General Motors have in the company's future. The company's lead outside director, George M.C. Fisher, has a .000839% stake in the company.
If he wasn't willing to take a bigger stake when times our good, how can he ask taxpayers to invest when the company is on its deathbed and the economy is in the toilet?
I'm skeptical of a big bailout of the auto industry, but insider participation would do a lot to win the battle for the hearts and minds.
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