Democratic presidential hopeful Barack Obama is set to meet with both GM CEO Rick Wagoner and Ford CEO Alan Mulally this week, in what the Detroit Free Press calls (thinks/hopes/opines) a "thaw" in frosty relations. A year ago, Barack Obama slammed manufacturers for their fuel efficiency and excuse mongering. "But expensive is no longer an excuse for inaction," Obama railed. "The auto industry is on a path that is unacceptable and unsustainable – for their business, for their workers, and for America. And America must take action to make it right." Whether "America" was code for "we the people" or Senator Barack Obama isn't clear– though the fact that Ford and GM are hurting for dough is. And now that Detroit's on the ropes, it's ready to meet Mr. Obama's challenge, begging bowl at the ready. Barack baby, we want to build more fuel efficient cars. We can build more fuel efficient cars. We already are building more fuel efficient cars. We bloody well have to build more fuel efficient cars. We will be building more efficient cars. So now can we have our subsidies, tax credits and CAFE exemptions? And you know what? They'll get it.
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Hoping that he doesn’t believe the load of excuses that the D2.8 royalty have been for years insulated from real world conditions.
Well, pick your poison. Tax credits to Detroit automakers or a taxpayer bailout of the PBGC when it goes insolvent from all the claims filed by former Big Three retirees. At least with tax credits and other handouts, the Detroit automakers have a chance to succeed.
I am sure there will be plenty of strings attached to any federal assistance. Hopefully it will lead to something besides business as usual and a return to a truck and SUV sales focus.
I don’t think hand outs will help GM at all, that’s just giving Rick a few more handfulls of millioin dollar bills to flush with the rest he pumps in the porcelain every day.
Ford seems to be getting the burn under control and stabilizing market share (obviously not sales).
I one case it won’t help, in the other it’s not going to be needed. But why stop the pandering while you’re good at it (speaking to most of the politicos, not just Obama of the rose colored glasses).
Opinions,
Bunter
With the bailout of Wallstreet and the banking industry, I don’t see how any politician can refuse to bail out the domestic auto industry. That’s what happens when the president is asleep at the switch with regard to regulation. The best we can hope for is that the feds drive a hard bargain, and I would not hold my breath on that.
I have fantasies of a presidential press conference sometime in the future when the GM losers are against the wall and begging. There’s a big chart showing market loss by year, money lost, assets sold, actions taken by Wagoner and his enablers on the board, and finally, changes made in board membership as demanded by the stock holders. These last two items will be flat lines indicating NO action taken. Then throw their sorry asses out.
I doubt Obama will rake them over the coals, but he should, and instead of Mulally he should have WCF I and WCF II present.
mel23,
It’s very, very possible that GM’s senior management will see SEC “interest” or shareholder lawsuits. You don’t vapourize equity that consistently without attracting some attention, even if it’s gross incompetence, rather than malice.
What a surprise. Obama undoing all he’s done to differentiate himself from the other candidates. He’s the front runner, and behaving like every other politician. Those that continue to buy his nice speeches ought to instead look at his actions.
I’m not 100% against giving incentives to GM or Ford, but without accountability and SIGNIFICANT changes in management and board, it’s just window dressing.
WCF I and WCF II
What are these?
Does anyone really think either side would do anything differently when it comes to Detroit? Honestly?
At the bare minimum GM’s leadership should be raked across the coals for this. Ford has made honest strides lately to correct their sinking ship, albeit a tad to late (time will tell on that one). Chrysler? They’re private now – no need to try and bail them out again.
In other news, Bill Clinton to meet with Wagner…
Strangely, both events are likely to have similar outcomes.
Qwerty wrote: With the bailout of Wallstreet and the banking industry, I don’t see how any politician can refuse to bail out the domestic auto industry. That’s what happens when the president is asleep at the switch with regard to regulation. The best we can hope for is that the feds drive a hard bargain, and I would not hold my breath on that.
The Bear Sterns bailout would seem to indicate that a GM/Ford/Chrysler bailout would also be in the works. However, it is easier to be sympathetic towards rich people than it is to the UAW. Bottom line, there is just a shortage of people who care about the domestic auto industry and wont lose a wink of sleep if it lives or dies.
@ jkross:
Obama undoing all he’s done to differentiate himself
He’s just going to meet with them. Diplomacy is better than ignoring them or just throwing money at the problem. Besides, he’s not even won the Presidency yet.
WCF = William Clay Ford
I’m fairly new to this site so I may be stating the obvious to some of you. As much as I deplore the current state of the Big 2.8, there’s much more at stake than just the fate of GM, Ford and Chrysler manufacturing plants and their employees. GM and Ford are 2 of the largest manufacturers in the world! They purchase from hundreds of suppliers, many of whom rely heavily on the auto industry for their survival. The trickle down effect if one of them fails would be enormous. If you think the sub prime mortgage crisis is hurting the economy, just watch what happens as the auto industry slows down. There is no way that the US government can stand by and let GM or Ford simply fail. I think Obama is starting to understand the implications and that is why he’s rethinking his stance toward the 2.8. Don’t get me wrong, I think the 2.8 are horribly mismanaged and out of touch with mainstream consumers in the US but they aren’t as stupid as some of you seem to think. They’ve had a very large anchor (UAW) weighing them down for years.
Very interesting that he’s meeting with GM and Ford. I seem to recall that his personal vehicle is a Chrysler 300C.
This has nothing to do with the auto industry or U.S. economy- he’s trying to get one of them to take that V8 Chrysler gas hog off his hands! =)
McCain has better taste in cars, IMHO, he drives a new Caddy CTS.
If the feds bail out the Big 2.8 then all incentive stock options and grants should be surrendered. Anyone who doesn’t play ball gets fired. Why should the executives get to collect on the revival of their company when the revival is funded by the taxpayers?
Obama has criticzed golden parachutes in corporate America. I wonder if he will walk the walk.
Qwerty,
Good one. I wonder about that too.
This link provides 17 good reasons for both presidential candidates to be chatting politely with 2.0 of the 2.8 prior to the first Tuesday in November:
http://www.electoral-vote.com/
I am increasingly convinced that GM may get loan guarantees, not so much for the sake of Ren Cen and its suppliers as it would be for Wall Street.
There will be a lot of big name banks who lose big if GM vanishes from the face of the earth. Nobody in New York or Washington wants that to happen if they can help it.
“…expensive is no longer an excuse for inaction…”
Isn’t that just the Democrat way of thinking? “It doesn’t matter how much it cripples business or the economy so long as we do something.” You can summarize the problems with the environmental movement in two words: prohibitively expensive.
We’re already throwing mega-money away on a project which has already failed. It’s called the “Global War on Terrorism”.
We might as well piss away more money here at home.
I hope Obama (for his sake) sets defined conditions for this mini “bailout”; the main one being that Detroit produces efficient cars that people will buy.
I also hope that part of the agreement involves revamping suppliers’ efficiency and innovation so that the necessary cost reductions don’t end up leaving the 2.8 at the mercy of Chinese suppliers.
It might be necessary for the Junior Senator to become president before making any promises. Then again maybe not.
Is GM & Ford this new JFK’s version of the Mob to get him in office?
I figure we need a domestic light truck manufacturer. So, last one to go out of business, we bail out.
So there it is, last man standing is immune to bankruptcy – game on.
GS650G :
It might be necessary for the Junior Senator to become president before making any promises. Then again maybe not.
Obama can make all the empty promises he wants during the campaign. He doesn’t get to break them unless (or until) he’s elected. It’s the American Way.
Obama’s campaign reminds me of a poetic parody that Mad Magazine ran during Jimmy Carter’s unsuccessful bid for re-election. It ended with a stanza that fits Barack as well as it did Jimmy:
Humpty Dumpty sits on the fence,
Humpty Dumpty knows this makes sense.
He’ll win all the voters up North and down South
By making full use of both sides of his mouth.