Separated At Birth?
Tin cup in hand
November 21, 2008 | This week the "Big 3" stooges of Detroit — Richard Wagoner (GM), Robert Nardelli (Chrysler), and Alan Mulally (Ford) — went begging on Capitol Hill and were sent home empty-handed. And rightly so.
Forget the tone-deaf gaucherie of flying in in their three separate corporate jets to plead for $25 billion to forestall the end of civilization as we know it.
Focus instead on their absolute unwillingness to take responsibility for any part of their predicament. To hear their testimony they are blameless. It's all the fault of the financial crisis.
We are asking for assistance for one reason, to address the devastating automotive industry recession caused by our nations' financial meltdown, and the current lack of consumer credit, which has resulted in the critical lack of liquidity within our industry.
The fact that they have been making cars that nobody wants to buy, and have been making SUVs and pickups that nobody can afford to run, didn't seem to cross their mind.
There's almost universal agreement that the Big Three have brought this misery onto themselves. The disagreement comes over whether to let them go the way of other failed companies or bail them out.
According to those who favor a bailout, the automakers are just "too big to fail," the same justification that was given for pouring billions into the AIG black hole. Millions of jobs depend on the auto industry and if they failed, three million jobs would be lost in the first year, they say.
The economy is already in a recession, and the collapse of the auto industry might be enough to tip it into a deep and prolonged depression, say some economists.
Many opposed to a bailout say that in a free-market economy the government should not be picking winners and losers. That argument is specious: the government picks winners and losers all the time. Most recently, the government said that Lehman Brothers was a loser and allowed it to fail and at the same time said AIG could not be allowed to fail.
In my mind there's a better reason to be opposed to a bailout: the Big Three auto makers have no intention of changing their ways. Give them $25 billion and they will surely be back in another three months claiming they need another $25 billion.
For any of the three to fall into bankruptcy would be bad — bad for the company, bad for its workers, bad for the economy. But it's not as if General Motors would simply disappear if they sought bankruptcy protection. Almost every airline flying has been in bankruptcy in recent years, some more than once. It's a chance to restructure the company, get out from under the weight of bad decisions made along the way, bring in new management, and get the company going again.
If the auto industry were to set its sights on developing alternatives to gasoline engines it could be a force for innovation and technological advancement. But it's clear these three stooges are not the ones to lead it in that direction. That being the case, I think it's best for the long run if they be allowed to fail.
They never learned the lesson that the time to re-invent yourself is when you're doing well, that in a global economy, as in life, if you fail to learn and adapt, you die.
And if they fail there will still be plenty of cars available to drive, many of them made right here in America. It's just that they will have brands like Toyota and Honda.
Last updated on Sep 10, 2016