So the latest in this whole saga is that Chrysler and GM will be granted a vehicle for at least $15 billion in loans without any concessions made by American auto makers. According to an article by the Washington Post, the legislation will include the ability for the White House to appoint a “car czar” to force the Big 3, if Ford indeed accepts money, to restructure or accept bankruptcy protection. I agree, I think that if the Federal government provides any taxpayer money to the Big 3, that they should be forced to make changes to their faulty business model. Why simply throw money at something that’s broke and will delay the inevitable, the demise of these automakers. If the Big 3 are unwilling to make these difficult changes, why give them money, let them fail.
However, what I find most disturbing about these recent revelations, is the following quote from the Washington Post’s article, which can be found here:
…some Democrats want to give the companies the money upfront and let President-elect Barack Obama name a car czar or full oversight board later, after he takes office.
So let me get this straight, Democrats were complaining, just the other day, about the lack of oversight for the $700 billion in bailout funds provided to the Treasury Department, and now they’re talking about providing the Big 3 with bailout money without ANY oversight? What’s the matter with these people? Oversight for financial institutions accepting bailout money, but not for the Big 3? Talk about a major double standard here.
I’m not a dummy, and I realize exactly what this means, delaying any oversight means no oversight anytime soon, that’s Congress’ standard operating procedure. Then, about 2 months later, the Big 3 CEOs will be back on the Hill asking for even more money with the same level of oversight.
Also, where is the UAW in this argument? What are they going to give up to ensure that their members don’t lose their jobs? Shouldn’t the UAW have a seat at the table here? I seriously doubt the labor unions want to make any concessions, and this is a question that seems to be avoided during these bailout discussions. If members of the auto labor unions refuse to concede anything, then the business model won’t be repaired, and we’ll be having this same discussion for a long period of time, except, this time, the discussion will be why these workers can’t find jobs now.
Management definitely holds responsibility as well. I wonder whose idea it was to continue to make gas guzzling cars when gas prices kept soaring to $4 a gallon and more? Why hasn’t any of the management of the Big 3 been developing alternative fuel vehicles? It’s discouraging to me that the Big 3 haven’t embraced innovation to a much larger degree than what they have. Granted, tonight, alone, I have seen 3 commercials for Chevy’s new Volt. But it’s not enough. The Big 3 have been declining businesses for quite some time, and finally, poor decision making on both the union’s and management’s parts have finally caught up with them, and now, it’s time to face the music.
Facing the music means paying for your mistakes, not asking for forgiveness from the American taxpayer. Take your lumps, revamp your product line and business model and let’s see if you can survive. But don’t count on the American people to bail you out of your mistakes.
