Treasury to hire BCG for GM/Chrysler

The Treasury is looking to hire BCG to assist with the plan for GM and Chrysler going forward. This is bound to spark outrage mostly because of the fees (up to $7MM) and also the feeling that the government is once again looking to pad the pockets of those capitalist fatcats.

However, we view this as a positive sign. The government is showing serious signs of wanting to ACTUALLY fix the problem effectively. Leaving aside politics, this is a marked difference from the Bush administration which had a penchant to appoint unqualified idiots to positions, solely based on their pre-campaign proximity to the power base. Obama & Co. have moved away from the mindset that the Federal gov't is their private treehouse and towards a results-oriented approach. This has been evident in a number of actions including the (failed) hiring of Nancy Killefer, keeping on Robert Gates as SecDef, and now this. By showing that they are willing to swallow their ego and ask (and pay) for outside help, this is encouraging news that GM/Chrysler may not continue to be a cash sinkhole indefinitely.

Aside from their horrible hunter-green color scheme, BCG is a solid choice to execute this project. There is a valid argument to be had about the effectiveness of the management consulting industry as a whole, and whether there was a better alternative (Treasury guys, existing GM/Chrysler strategy groups) but this strikes us as situation where the government made a likely unpopular decision that they believe will lead to the best outcome. The only real criticism we have is that the Treasury should have at least negotiated the fees a little. At a time like this, BCG's auto practice must be desperate for work and would certainly have done it for a lot less (especially given the marquee nature of the assignment).

Comments

[killben (not verified)]

Issue is not who has been awarded the contract .. but how transparent was the bidding process .. what was the price paid..