At GM, directors drive into a ditch: it's not a pretty sight, and the board bears a big responsibility for reckless handling.

• Author: Sutton, Gary
• Position: General Motors Corporation

LET'S SENTENCE everybody who served on GM's board since 1970 to prison terms of four months and 10 days.

There is precedent.

Remember Jimmy Hoffa? There was a guy who understood the beauty of stealing retirement money. His thefts went undetected for decades, so the question of whom to blame faded. Unfortunately for Jimmy, some of his "trustees" didn't like the math, and his life expectancy got adjusted. Jimmy's unplanned retirement began at age 62, so his payback was 15 years of life lost, assuming a normal expectancy.

Granting generous benefits, without recording them accurately as liabilities, is the same sort of long-term theft--undetected at first.

Look what that's done to GM.

Today they've got an added cost of $1,500 per car to pay for retiree health benefits. The doctor bills cannot be hidden, now that they're actually being paid. So GM is that much less competitive. And when that excessive cost shows up as reduced value in the showroom, sales slip. When sales slip, that $1,500 per car rises to, say, $2,000. When that $2,000 per car makes vehicle prices even worse, sales drop again. With fewer cars being bought, well, you get the picture.

The financial strain of this legacy has metastasized throughout GM.

Hummers, Corvettes, and Cadillacs add excitement, but $3 gas will constrain those labels. Chevys, Pontiacs, Oldsmobiles, Buicks, and Saturns are so boring they can cure insomnia. While a smaller car company, Toyota, announces plans to assemble hybrid vehicles in Kentucky, GM announces a joint venture with another stumbling giant, Daimler Chrysler, to develop hybrids. But GM pushes hydrogen fuel cell research by itself--a technology that might become practical within this Ice Age--but can't find the cash to upgrade its transmissions to contemporary designs, falling behind again. Six- and seven-speed gearshifts in others, but not GM, produce higher performance and efficiency.

Note that GM's most strident message in its annual report is the need for the government (that's you and me) to fund universal health care. At a time when bold action is needed, these capitalists are turning to Washington for help.

None of this is pretty. But the damage was done with each new retirement health care giveaway, none of which got funded when given.

So why would Kirk Kerkorian, a guy who has more money than you and I together, up his holdings to 9% of this seemingly incurable mess? Well, if he can get any kind of control, Kerkorian's not...