I KNOW I'VE MADE SOME VERY POOR DECISIONS. Dave. Stop, Dave.

Word reaches Cold Spring Shops that General Motors can assure us now, very confidently, that they feel much better.

General Motors today unveiled an unusually frank advertisement acknowledging it had "disappointed" and sometimes even "betrayed" American consumers as it lobbies to clinch the federal aid it needs to stay afloat into next month.

I know everything hasn't been right with me, Dave.

The print advertisement marked a sharp break from GM's public stance of just several weeks ago when it sought to justify its bid for a U.S. government on the grounds that the credit crisis had undermined its business in ways executives could never have foreseen.

The tape that plays after the last notes of "Bicycle Built For Two", however, does not refer to something extraordinary dug up on the Moon.

What's a little more unusual is a company coming out and apologizing for just being generally lousy over the past couple of decades. But that is essentially what GM is doing now, with a curious campaign touting its journey on "the road to redemption." GM has run big two-page ads in major newspapers and also spins its tale on the Web.

Like all ad campaigns, the bottom line is that GM, right now, is a fine, high-quality company, whose products you should buy immediately. It's the journey to this obvious destination that's interesting. "Thirty years ago, GM quality was the best in the world," the print ad starts. "Twenty years ago, it wasn't."

And apparently the company muddled along in a sub-par manner for 10 years before deciding to change. "The hard part [was] breaking out of our own bureaucratic gridlock," the ad copy continues, and "learning some humbling lessons from our competitors." After a "painful" decade of effort, they're now back up to snuff, putting out great cars, etc., etc. The ad cites positive consumer-satisfaction research and recent automotive awards, presumably the hook for the campaign. "The road to redemption has no finish line," the copy concludes. "But it does have a corner. And it's fair to say we've turned it."

GM says that campaign is aimed at the apparently large segment of the car-buying public that simply won't consider its models. The company's North American president calls it "a unique effort to reach those consumers whose perceptions of GM are out of step with today's reality." I suppose that's reasonable, but let's say you're one of the thousands who did buy a GM car in the 1980s and 1990s. You, apparently, were a sucker. Your vehicle was not put together by a company with "a true culture of quality in every division." That's not what I'm saying—it's what GM is saying.

The code was placed in the computer's memory banks when Discovery left Earth orbit in 2003.

General Motors is running a new ad campaign in which they effectively admit they built lousy cars from the mid-seventies to the turn of the millenium. But their new stuff is really great, it really is! We appreciate your honesty, guys, but it can't erase bad memories of the '78 Malibu we owned for 6 months.

A restructuring or a managed liquidation is a bad thing?

Congress appears to think so.

Congressional Democrats and the White House worked to resolve their last disputes Monday over terms of a $15 billion bailout for U.S. auto makers - complete with a "car czar" to oversee the industry's reinvention of itself - that's expected to come to a vote as early as Wednesday.

Top Democrats gave the White House their proposal for rushing short-term loans to Detroit's Big Three through a plan that requires that the industry remake itself in order to survive. The Bush administration gave a cool initial response, saying the measure didn't do enough to ensure that only viable companies would get longer-term federal help. Negotiators worked into the night Monday to resolve differences.

"We've made a lot of progress in recent days to develop legislation to help automakers restructure and achieve long-term viability," Dana Perino, the White House press secretary, said in a statement. "We'll continue to work with members on both sides of the aisle to achieve legislation that protects the good faith investment by taxpayers."

President George W. Bush himself said it was "hard to tell" if a deal was imminent because definite conditions had to be met. "These are important companies, but on the other hand, we just don't want to put good money after bad," he said in an interview with ABC's "Nightline."

Despite optimism on both sides that Congress and the White House could reach a swift agreement on the measure, it was still a tough sell on Capitol Hill.

It's a tougher sell for bankruptcy lawyer Richard Tilton.

Sentiment is growing that a taxpayer-finnaced “prepackaged” Chapter 11 is the best way to solve both GM’s business and financial problems, and perhaps of other automakers. Maybe so. Let’s have a look…

He continues in an instructive "Frequently Asked Questions" format.

Two University of Chicago finance professors elaborate.

We believe that a Chapter 11 bankruptcy filing for GM is the only possible solution. However, we recognise that in the current environment, there are several likely inefficiencies associated with the bankruptcy process. In particular, if we do nothing and wait for GM to file for bankruptcy, which would likely happen in a month or so, we would risk a bad outcome of the proceedings, namely an inefficient liquidation of the company and a substantial amount of social disruption from the sudden loss of jobs. We therefore propose that the government oversee a prepackaged bankruptcy for GM that would give the company the restructuring it badly needs and avoid inefficient liquidation. To be successful, this restructuring requires several elements.

They seek to avoid the concatenation of bankruptcies that came in train of Penn Central's, which required a Conrail and an Amtrak to keep the trains rolling.

A cautionary tale is found in the DIP [debtor-in-possession] financing of Eastern Airlines, which kept flying in bankruptcy until the value of its assets had been driven almost to zero. To avoid this problem, we propose that while the government provides the funding for the loans and the guarantee for most of the losses, the actual lending decision should be made by a commercial bank. In exchange for the underwriting fees, the private bank could be held liable for some percentage of the last losses on the value of GM’s debt. In this way, we impose a limit on GM’s ability to waste resources. When the value of its assets has been impaired, GM will be unable to get any new financing, because the private institutions will pull the plug. In this way we avoid the risk that GM will die of premature death in Chapter 11, but we also prevent GM from exploiting the government guarantee to delay the restructuring.

Third, the GM bankruptcy must avoid setting off a costly chain reaction of other bankruptcies. In particular, the bankruptcy of related suppliers must be avoided. If GM were to default on its payments to these suppliers, many of them would be broke, with egative consequences for the other manufacturers of cars in the United States. DIP financing must therefore be sufficient to allow GM to make its payments to suppliers. Furthermore, bankruptcies of foreign subsidiaries should also be avoided. As the Lehman bankruptcy has shown, foreign proceedings are more rigid and would contribute to the possibility of excessive liquidation.

Fourth, GM must emerge from Chapter 11 as a smaller company. This necessitates shutting down the most money-losing segments of the company, while also providing incentives to foreign manufacturers to buy some of GM’s assets without union contracts attached.

Note the other parallels to Amtrak, which began to make the trains worth traveling again by knocking off half the service, and to Conrail, which closed redundant properties such as the Erie and the Canada Southern.

The proposal says little about regulatory constraint. For lack of other options, policymakers repealed full-crew and caboose laws and allowed the railroads greater freedom to change rates. Perhaps the legacy car companies, or their receivers, or the car Kaiser, will have their own Sherlock Holmes moment.