Business guru Jack Welch, the former GE chairman, said that the federal government shouldn't bail out General Motors and that the troubled carmaker had to heal itself with cost cuts and "new and better models."
At a news conference Friday before a speech to the Long Island Association, a business and civic organization, Welch said that in a global marketplace, consumers care less about where a product is made than about its quality.
"I don't think the federal government should step in," he said. "The Japanese employ a lot of Americans."
General Motors lost $8.6 billion last year as it was struggling with declining market share and the staggering medical and pension costs of an aging work force -- so-called legacy costs.
In November, it announced plans to shutter 12 factories and eliminate 30,000 jobs in the United States and Canada -- a fifth of its North American work force.
"These legacy costs have got to be dealt with, and the manufacturer has to come out with new and better models," said Welch, who retired from NBC parent GE in 2001 and is credited with increasing GE's market value from $13 billion in 1981 to $400 billion when he left.
As GM has produced and sold fewer vehicles and shed employees in the United States, some foreign automakers, especially Toyota, have produced more cars and trucks and increased employment. Asked if the net effect was a wash, Welch said, "I think it will be."
Neither General Motors nor similarly troubled Ford Motor Co. have asked for direct federal help, but GM spokesman Chris Preuss said the company believes government action is needed to help control soaring medical costs. "Those costs are making an already difficult situation more so for us," he said.
Some analysts believe that GM could be forced to seek bankruptcy court protection in coming years if its fortunes don't improve.