Why is there such a disconnect between democrats and republicans?
Democrats are gung ho on giving Detroit a slice of the 700-billion-dollar Wall Street bailout/rescue while republicans say: “No way, Mulally.” (Ford CEO, Alan Mulally)
Chrysler (CEO Robert Nardelli) Ford and GM see congress dishing our gobs of free money and they want some too. So they’re asking for 25-billion (which won’t get them very far. GM is burning through 2-billion a month. 12 months and it’s all gone, anyway!)
Senate Democrats are all set to introduce legislation Monday, with a possible vote by Wednesday. Massachusetts Democrat, Barney Frank (Chairman of the House Financial Services Committee) supports the Detroit Bailout and he’s becoming stridently incoherent, while republicans are abandoning ship.
Meantime, The White House is proposing its own plan. It wants the 25-billion to be dished out in the form of loans (previously approved) that automakers would use to develop fuel-efficient vehicles and use the money for more immediate needs. Congressional Democrats say the White House plan is shortsighted.
Left to Senate republicans like Jon Kyl of Arizona, Detroit’s Big Three, or more appropriately, The Big “Reduced” Three, can go to hell! The Democrats resident Santa Claus, House Speaker Nancy Pelosi, (D-CA) would like to invite Detroit to the treasury for lunch.
Now, I understand the importance of the auto industry in and to America. It would be a shame and a disgrace to see it die. But by golly, GM CEO Rick Wagoner says: He won’t offer to resign, because it’s not clear to him what purpose would be served. I say he needs some bi-focals. And possibly Lasik surgery.
Waggoner says “our job is to make sure we have the best management team to run GM“. That apparently includes Mr. Waggoner who has run GM for the past eight years. Under his brilliant guidance, GM lost 39-billion-dollars in the third-quarter (2008), the second-worst quarterly net loss in U.S. corporate history! GM stock has also lost 95-percent of its value. Don’t resign until the stock reaches a penny. Mr. Waggoner. (It’s now about $3.00!)
President elect Obama made a good point on CBS’s 60 Minutes Sunday night (November 16/2008). Obama said normally, he’d let GM go bankrupt and restructure, but these are not normal times, and given the credit freeze, even for profitable companies, turning our backs on GM now could kill that company. As usual, when Obama talks, he makes sense, and even if you don’t support that position, he sells you on it!
So by all means, go ahead and try to save GM, and Ford and Chrysler. But can we save them “as is”? I’m not sure. I have not delved into the economics of those three auto makers. Except for what I hear about high personnel costs, retirement benefit burdens, high operating costs…cars that are not up to par and way too expensive to produce…and apparently, an aversion to change.
Just last year, Detroit’s automakers fought government efforts to improve fuel efficiency and threw their weight behind a weaker, watered down bill pushed by Senator Carl Levin (D-MI). The same Levin is now shouting the loudest about “rescuing” Detroit. He and these automakers remind me of a symbiotic relationship, even if I don’t know why!
Detroit’s car makers spent millions of dollars hiring lobbyists to safeguard their status quo. Fuel efficient cars? Hell no. Let’s build Hummers and bigger SUV’s. Green vehicles? Why not crush them! Today, they want a bail-out.
Still, I guess, if we can bail out those AIG executives who are still guzzling Dom Pérignon, then I guess we can also bail/rescue GM. Let’s just hope Toyota isn’t next. They do build some good cars here in the U.S.
Thanks, Toyota. Yes, you can!
By the way: Twenty years from now, oil companies will be going to government for a bail-out, because their industry will be going down the drain…unless they reinvest in new, green, clean technology. There is a lesson to be learned…if we care to learn it!