Detroit refuses to contemplate the only possible savior for their broken businesses: bankruptcy. Unless Chrysler, Ford and GM use Chapter 11 protections to kill products, spike brands, close factories, “renegotiate” labor agreements, terminate dealers and generally reinvent themselves, they will continue to die by a thousands cuts. The automakers’ pride– and their belief that “no one buys cars from a bankrupt automaker”– prevents this radical move. So, instead, they’re pursuing a federal bailout. Only they don’t call it that. And therein lays the seeds of their final destruction.
Motown’s federal bailout is set to arrive as $50b worth of low-interest federal loans. The money is a [now-inflated] part of a $25b provision in last year’s Energy Bill, disguised as an attempt to “help” Detroit retool 20-year-old factories for a fuel-efficient future. TTAC and other commentators immediately identified it as a bailout. Simply put, the 20-year caveat restricts the loans to Detroit.
Thanks to the very public Bear Stearns bailout debacle, and the even more prominent Fannie Mae and Freddie Mac “rescue,” and The Big 2.8’s increasingly obvious financial distress, the convenient falsehood of Detroit’s “green” federal assistance has lost currency. Hence Bill Ford, Alan Mulally, Mark Fields, Rick Wagoner, Bob Lutz, Jim Press and the rest of the Motown elite are busy denying that the money is a bailout. As Queen Gertrude remarked about her evil doppelganger in Hamlet’s play-within-a-play, “The lady doth protest too much, methinks.”
There are a couple of simple reasons why Detroit won’t come clean about their need for a taxpayer-sponsored financial infusion. First and foremost, personal power.
As Edward Niedermeyer observed in his Aporkalypse Now editorial, we’ve been here before. The last automaker “bailout” was bestowed up Chrysler. It was, in fact, a federal loan guarantee program (this time it’s actual loans). Uncle Sam demanded an executive shakeup and enough management-related strings to turn the Pentastar Pinocchio back into a marionette. If any of the current players admitted to the feds that the $50b was a bailout, they’d lose their autonomy (i.e. power) and, most probably, their jobs.
If you wanted to be more charitable about Detroit’s craven denial of their position at the head of shit creek sans paddle, you could say that Ford, GM and Chrysler don’t want to destroy their [remaining] customer loyalty. (Never mind potential conquest sales, we’re moving beyond that now.) They recognize that the word “bailout” and “bankruptcy” are virtually interchangeable in the public mind. And for good reason. It’s the truth.
While Motown’s moguls deem this prevarication necessary to shield the buying public from the heretofore under-the-radar realization that one, two or all three Detroit automakers are in real danger of going bye-bye (say sayonara to your vehicle’s resale value), the lie puts The Powers that Be in a ludicrous position. Even as they hustle over to Capitol Hill to secure their piece of the multi-billion dollar public pie they must pretend that everything’s hunky dory.
“Ford CEO says effort to regain profits going well” today’s Detroit News headline blares. Yes, OK, if everything’s going so well, why does Ford and friends need $50b of our money to fund their recovery? Bill Ford trotted-out the new party line: it’s all about the SPEED of bringing green machines into the supposedly free market. If the money is denied, “It would just make everything more difficult, and we may have to go slower, and that’s clearly not what society wants.”
Sure, I blame society. But it’s hardly likely that society will blame society. Despite the fact that bailout bucks are free-flowing at the moment, despite the fact that Michigan is a key state in the upcoming presidential election, despite Detroit’s cunning plan to avoid speaking the word “Voldemort” in public, The Big 2.8 are not going to have as an easy time of this as they think.
The “bailout by any other name would still be so green” ruse may fool willfully ignorant Big 2.8 dependents– execs, union workers, suppliers, dealers, etc.– but the “change Washington” election rhetoric circulating through the rest of the country indicates a growing Pink Floyd mentality: “keep your hands off of my stash.” During these times of pseudo-austerity, telling the people’s representative that $50b in federal funds is “nice, but not REALLY needed” is not going to be a particularly convincing strategy.
This whole boondoggle is just another in a long line of half-assed, boneheaded decisions that reflects Detroit’s ongoing inability to fully face their actual, honest-to-God brand, product and profitability problems and develop a viable strategy– now involving Chapter 11– to overcome them.
There is but one word that truly suits this $50b federal loan guarantee/bailout program: enable. Even with some pertinent strings, the money will simply enable Detroit to continue its addiction to stupidity, sloth, greed and arrogance. And that’s why I believe Detroit should not receive the funds.
Alas, poor Yorick!–I knew him, Horatio;
a fellow of infinite jest, of most excellent fancy …
Let us not inspire the ire of English professors by misquoting the Bard!
(TTAC has troubles enough with CarDomain!)
RF,
I remember like it was just yesterday when United Airlines declared bankruptcy.
Everybody said look out, you’re gonna lose all the mileage you stored up.
Its the end!
I tried to explain this a wonderful turn of events and the only way for them to fix the problems…union contracts.
Well, they came back and the new deals are all in place.
Its was a good plan AND everybody kept flying.
As a side note, I remeber a plot coming on the speaker after one flight and saying thanks…
“We know you have a choice when chosing bankrupt airlines, and we’re very glad you chose ours…”
Very funny.
Oh yes it is enabling. Until Detroit changes its entrenched thinking about what constitutes a viable product in the 21st century they’ll be behind the curve. Farago you’re a man of infinite jest.
Good Job.
Lotta work went into this feature.
Thank you very much.
But we must temember that this is very similar to the oil price crisis.
Even if oil wasn’t really short, it was a wonderful time to act like it was and prices rising was the natual market response.
And did the profits pile!
We simply cannot trust what these companies, especially Ford, tell us.
It is to their benefit to cry wolf.
It is to their benefit to grab whatever they can from the situation.
If they think there is money about to be doled out, they would be silly to act like they don’t need it.
Here, here! The rest of the county ain’t fooled by this utter bullshit, and see it exactly for what it is.
Bailout, hell. This is taxpayer blackmail, which our presidential hopefuls are only too happy to oblige in the craven quest for buying Michigan’s 17 electoral votes.
Robespierre
Once more befits it that the voice of Truth,
Fearless in innocence, though leagured round
By envy and her hateful brood of hell,
Be heard amid this hall; once more befits
The patriot, whose prophetic eye so oft
Has pierced thro’ faction’s veil, to flash on crimes
Of deadliest import.
Actually ande5000 I think the rest of the country is fooled by this BS. But don’t worry they will get the bailout with no strings they will burn through that money too and then the public might catch on.
As I’ve said before, the U.S. political system relies on taking money from one group (taxpayers) and giving it to another group (auto industry in Ohio & Michigan i.e. “battleground states”.) This whole scam stinks to high heaven. Our politicians are whores, but at least they had a little decorum & sense of shame back in the good old days…………
Republican free market doctrines seem to be well and truly dead. You can’t blame the current candidates for the recent massive bail outs of the financial giants. Bush, Cheney & Co. get full marks for those.
Does anyone remember which administration put the tough constraints around the original Chrysler federal loan guarantees? None other than Jimmy Carter. You know, the guy with a Bachelor of Science degree from the Naval College who did graduate work in Nuclear Physics. He never got a business degree, but somehow managed to make the family peanut farm a huge success even without an MBA.
As far as the airline industry analogies go … watch out. Not a one of the airlines which went through Chapter 11 is a robust and healthy company today, and their service quality has gone into the crapper.
I thought Carter’s ‘peanut farm’ actually went bankrupt in the 1980’s. I know he quit investing in it right around that time. But by then the activities that would eventually encompass the ‘Carter Center’ were already in full swing.
I’m in favor of a bailout for a lot of reasons near and dear to the American way of life. I’m also in favor of certain changes in our laws to make the playing ground a bit more even for ‘legacy’ firms in many industries. Not to mention building a level of equivalence between nations when it comes to trade (don’t get me started on the Japanese and Korean mercantilist approaches).
There are two sad sides of the coin right now. The first is the degree of segmented self-interest that came from the cash cow known as the American auto industry. The second is our collective ignorance in believing that any imbalance can be overcome because of our American culture and can do spirit. The simple laws of economics were a bitch for the glorious Romans, Spainiards, and British, and now the United States is seeing many of the same pillars of it’s society gradually dissolve. History does not change very much, and neither do the long-term results of uneven trade and short-term greed.
John Horner
Bush and Chaney are responsible for this…
Jimmy Carted is a smart guy?
John, your ruining my morning.
The cold deep dish pizza I had for breakfast is stirring.
Everything was going great ’till you said this.
Have you ever hear of a thing called Congress?
The peoples representatives?
Power Of The Purse?
Well, don’t look now but your Dem slip is showing.
Not to mention building a level of equivalence between nations when it comes to trade (don’t get me started on the Japanese and Korean mercantilist approaches).
OK, for the sake of arguement here, if the Japanese “opened” up to American made auto imports what would we sell in Japan?
I don’t think there is much of a market for full-sized SUVs and Pick-ups, nor do they need a recycled Vibe or Fusion. We already sell the Vette in Japan so what are the American cars that the Japanese are being deprived of?
The many Americans that do buy Japanese cars do so because they are dissatisfied with products being built and sold by the traditional American manufacturers. I dont not need an F-150, a Tahoe, a Wrangler, a Mustang , a Challanger, or a Corvette. All of the “best” domestic vehicles are just more vehicle than I need or want. The rest of the stuff sold by the domestics does NOT measure up to the competition.
Before we start blaming the trade imbalance I think we should actually have a viable product to sell in foriegn markets. If GM, Ford, and Chysler are having a hard time getting US to buy their junk why on earth would you believe that it would sell in markets that already have higher expectations AND DIFFERENT TASTE?
McCain is supposedly pushing the bailout for Michigan’s votes, but what if Michigan goes for Obama while McCain wins the election?
McCain has a good memory. I can see him letting Michigan twist in the wind.
Of course, I’d do it even if I carried the state…
I would only support a bailout if there were the following strings attached:
– First and foremost, the top executive managers must leave the company on their golden parachutes based on the condition of the company (do not use this loan money to pay out these incompetent, smug asshats).
– Second, throw out all the incompetent, smug asshats on the Board of Directors and require 50% of newly installed ones to be independent.
– Require Ford Family to give up its unfair exponential voting block (sorry but it’s incomprehensible a public company in this condition should still have this amount of control from a single entity).
– Create a Federal panel with power of bankruptcy courts and allow them to close dealers, brands and the bloat they so have.
– Give them guarantees to break the UAWs cancerous deathgrip.
– Port over all funds for VEBA, etc. into IRAs and 401ks and let the UAW workers and retirees live like the rest of us.
– NO DIVIDENDS until every penny is paid back to the Fed – any and all profits should be reinvested back into the company and not its wealthy idiotic shareholders that have for so long kept this status quo of incompetence (ya know like most other companies that have fuel efficient vehicles).
In all – they need bankruptcy but that would be admitting failure. They are going bankrupt but with this political climate everyone gets a bailout right? Stupid form versus function.
jaje: I would only support a bailout if there were the following strings attached:
– First and foremost, the top executive managers must leave the company on their golden parachutes based on the condition of the company (do not use this loan money to pay out these incompetent, smug asshats).
– Second, throw out all the incompetent, smug asshats on the Board of Directors and require 50% of newly installed ones to be independent.
– Require Ford Family to give up its unfair exponential voting block (sorry but it’s incomprehensible a public company in this condition should still have this amount of control from a single entity).
In other words you would only support the full nationalization of the industry? Dumping the board of directors (which is elected by owner shareholders) and stripping shareholders (i.e. the Ford family) of their votes means that the federal government would de facto own the businesses. A bailout under any circumstance is a bad deal.
Unfortunately the Freddy Mac / Fannie Mae bailout is a dangerous precedent. It creates a condition where profits are privatized but losses are passed to the tax payer. Wealthy investors have enjoyed big dividends and capital gains over the decades but now that the industry is in trouble, every working stiff who earns enough to pay taxes gets screwed? And talk about encouraging big businesses to take reckless risks! No thanks.
RF,
I think you need to do an article on why you believe tht C11 would be ok for the Detroit 3. Everything I’ve heard, “conventional wisdom”, says that it would be death for any automaker to go C11. If your view on C11 is only your opinion, fine. But if it’s based on something more substantial I would like to see you flesh it out in a future article.
windswords:
Will do.
william: You are jumping to a conclusion I was not implying. I want their current inept leaders and supporters removed from their positions and new ones hired – no nationalization of the industry. These companies cannot survive as the idiots in charge are the reason why they are failing and giving them $50B of taxpayer dollars to do as they will is not a smart idea. How much in bonuses and dividends do you think they will give themselves – when they are losing money hand over fist?
I was born and raised (first 18 years) 4 blocks outside of Detroit. I have family that have and still do depend on General Fordebus for their well being. I have bought their products even when I knew that for my own well being it might not have been the best choice. I have argued vehemently for buying American or, at least, consider them. I presently own one of their products that I bought new, is coming up on 100k with only one trip to a repair shop at a cost of less than $200. And would buy another.
But I say no. No money. Live by the sword…
Can we please start calling them the Detroit 3 or something like that to reflect the reality of the new sales rankings?
Thanks!
And if I get a vote: no bailout! (and I live in Michigan and work for an automotive supplier. Don’t worry people, we’ll find stuff to work on. Suppliers are historically a LOT better at strategy than the Detroit 3 have ever been)
There seems to be a general consensus here and in other TTAC threads:
— a bailout is not desirable but likely inevitable; it almost certainly won’t work
— the D3, management, white collars, UAW, their boards, and stockholders all must pay a price for federal largesse or bankruptcy reorganization
— the key to any recovery, based on either a bailout or bankruptcy, is marketable product
What should the D3 look like, best-case, after a bailout or bankruptcy?
— GM goes to 2 brands, Chevrolet and Cadillac. Current products are apportioned accordingly, with little or no overlap. Dealer nets are sized appropriately.
— Ford’s top manager, Alan M., remains in place. The Ford family’s influence is curtailed. Mercury dies. European product flows into Ford, complemented by US trucks and SUVs/CUVs. Lincoln gets revitalized as the “big car”, luxo brand.
— Chrysler dies. Cerberus takes it in the shorts. Jeep goes to the highest bidder.
What am I not thinking of?
I agree with Robert. A bailout will only forestall the inevitable Bankruptcy filing for a couple of years.
The underlying weakness of the Detroit 3 are easily identified, and none of them are being addressed by the bailout:
1) Bloated dealer structures and state franchising laws that prevent the automakers from right-sizing their distribution channels.
2) Brand overlap and unsuccessful brands that are draining the corporations. (I’m looking at YOU, Mercury, Dodge, Saturn, Buick, and Hummer)
3) Cannibalization by making 4 versions of one vehicle to satisfy the dealers (See #1 and #2). Saturn Outlook, anyone?
4) Contractual obligations that grossly inflate the cost of vehicles to pay for retirement and health benefits that the companies cannot afford.
5) Incompetent management that led to #1,2,3, and 4.
Despite the short term pain, allowing the market to have its way with Detroit is the only sane path to the future. Only when they have to face the cold reality will they make the necessary changes or die.
As we are seeing in the extended mortgage crisis, by putting band-aids on the problem, you only put off the eventual day of reckoning. Ugly as it is, we have to let these companies find their way or perish in the open market.
When you’re in a hole, quit diggin’
Detroit can relax about what this process will be called. The mainstream media has already decided it’s a “bailout”. Maybe the term is incorrect, but it’s easy to say and easy to remember.
Anyway, most people understand that if your kid screwed up his/her credit and needed you to co-sign a loan, you’d certainly be “bailing” him/her out.
So, even though they might not declare bankruptcy, for all practical purposes they would be.
Unless Chrysler, Ford and GM use Chapter 11 protections to kill products, spike brands, close factories, “renegotiate” labor agreements, terminate dealers and generally reinvent themselves, they will continue to die by a thousands cuts.
RF,
You assume that the suits know this. I see no evidence that they do. Is that not the underlying problem here? GM actually believes it’s “too big to fail” (and recent actions by the Feds seem to support this). Mulally still hasn’t killed that pointless middle brand. And Chrysler? Whatever the three-headed dog is doing, it’s NOT working.
Heck, the whole “Afred Sloan is a business genius” is a crock of s… as far as I’m concerned. Why have a bunch of different brands? Even the US conventional wisdom, that you at least need a luxury brand seems questionable to me: Shouldn’t Caddy just be a Chev model? See Honda’s approach to the rest of the world…
It is said that the difference between government and private business is this: If a private business undertakes Task X, it tries to complete it with as small an outfit as possible (to maximize profits). When a government entity undertakes Task X, it throws as much (of everything) into it as possible, so that the man in charge can show how competently he can handle a big undertaking. Somehow the D3 are acting like government entities. At all levels.
Hamlet ? That’s Winnie-the-Pooh’s little friend, right ?
I would say that the current bail outs are just one more nail in the Republicans’ coffins. The only trick though is that they seem to have bipartisan support. So, who are we to vote for?
Fannie and Freddie are certainly different beasts. Congress completely failed to keep them regulated, and this is a government mess. So, the government needs to clean it up. Plenty of bipartisan blame to go around. What we need is to get the government back out of that business as well. Frannie would be in bad enough shape if they hadn’t been forced to use their funds for pork by Congress for years.
I would bet someone better informed could trace a lot of the current problems back to when the government forced most of the regional banks into insolvency while protecting the New York based behemoths twenty years ago.
It goes back to the whole too big to fail thing. Banking is rightfully regulated. How about the regulators (and legislators) do their frigging jobs for once?
I have a buddy who says we could fix most problems by placing the word ‘incumbent’ on the ballot where applicable. Then voting could be easier for everyone. Unhappy? Throw the incumbent out. He may have a point.
The 2.8 have been bankrupt for some time. We’re just seeing more now that the curtains have been opened.
All of the problems endemic to the 2.8 point to the same thing – dysfunctional, insular corporate culture. No amount of money will fix this, because the problem isn’t money. It’s balls.
I have a buddy who says we could fix most problems by placing the word ‘incumbent’ on the ballot where applicable. Then voting could be easier for everyone. Unhappy? Throw the incumbent out. He may have a point.
I like it. The only problem I see, is that it does not work too well in a two party system. Anybody (still) thinks that a President Obama will fundamentally change Washington? Anybody thinks handing Congress (back) to Republicans will solve anything? Excluding the Kool-Aid drinkers, obviously…
We need choice, and more of it. Unfortunately the outdated Electoral College prevents us from getting it. But you can be sure that maintaining the comfortable status quo has bipartisan support…
I don’t know, man, I’m a believer in the “nobody buys from a bankrupt automaker” line. I’m just sayin’, I want a Camaro, but I want GM to be around when I do buy one.
Engineer: The only problem I see, is that it does not work too well in a two party system. Anybody (still) thinks that a President Obama will fundamentally change Washington? Anybody thinks handing Congress (back) to Republicans will solve anything? Excluding the Kool-Aid drinkers, obviously…
A lot of our current problems with easy credit actually began in the 1990s. The expansion of credit has been a bipartisan effort.
We are now returning to more sane lending standards. Unfortunately, many businesses – particularly the automobile and housing sectors – have come to depend on sales to customers who really shouldn’t be borrowing money.
Let them die if they can’t compete. I’d rather have gubmint back off the CAFE regs than throw $50B down a rat hole, buying votes! If these companies are worth saving (and I think they might be), then Congress shouldn’t regulate them to death while they attempt to right their ships. If these entities can’t survive a changing market’s evolving desire for well-made, fuel-efficient vehicles, then the shareholders, managers and employees should bear the consequences of this failure, not the U.S. taxpayer! Let the “victims” find something else to do.
Bailout Watch 32: Farago Votes Nay
By Robert Farago.
Did you refer to yourself in the third person?
As long as we’re in a “bailing mood,” what’s the harm?
Really!
Airlines.
Banks.
Fannie Mae.
Freddie Mac.
G.W. (Iraq war…).
Various failing banks.
Halle-Burton. (Bidless awards).
What else?
We need choice, and more of it. Unfortunately the outdated Electoral College prevents us from getting it. But you can be sure that maintaining the comfortable status quo has bipartisan support
I’ve always thought that the US needs at least two more political parties: someone to siphon either the social or economic conservatives from the Republicans, and a legitmate Green or Socialist party that would allow the Democrats to stop pretending and say they’re centre/right party they are in deed but not word.
Right now, moderate right-wingers and less moderate leftists have to put a bag over their head and think of England when they cast their ballots.
If you ask me, Ford is the ONLY company that deserves a bailout. They are the only company that has a management that knows what they are doing, a clear plan to return to profitability. Plus, Ford’s hail mary products are actually probable. They aren’t betting the farm on some magical gas-electric plug in car that so far seems to be nothing more than vaporware.
Chrysler doesn’t need a bailout. They are owned by a cash-flush company specializing in turning around troubled companies. So they pretty much have a handy little cash dispenser in the corner to use when they need it. GM, on the other hand, should only receive a bailout if they agree to go C11 to shed all of the agreements that are bounding the General, kill everything but Chevrolet and Cadillac, and shed useless dealers, and if the government can come in to clean house to give GM a new management. I think all the big wigs except for Lutz should be given the boot. I mean, Chrysler’s product revolution in the early 90s is proof that when he is surrounded by competent people, Lutz can actually be a valuable person to have.
I have a dream that one day I could wake up where my dream would be no different from reality. Where smiles of people would be carried from their sense of happiness , security and sincere honesty not pretension, of insecurity or masks of moral decay . I have a dream that one day my America would wake up from her cancer torn body of her own greed and lick her wounds with wisdom and divinity of common sense . I have a dream, that she would wake up from her slumber, being awaken not by bankruptcy waves of Chapter 11 and 7 nationwide but by her artisan workers keeping the country ticking 24-7. Of her ability to stay sober through tempests of monopoly binges and fluctuating Wall Street ebbtides. I have a dream that one day middle class working fathers could take pride in showing their sons the achievements of their spirit of invention, and forge iron to conquer skies with hereditary power of human inquisition to new clusters of galaxies. I have a dream that one day our soldiers would stop dying for the sake of fiat dollar and profit margins of Halliburton. For the divine chateaus of Bilderberger group and her raves of handcuffing finances and gold reserves .I have a dream that this nation can take scissors of judgement and cut off the strings of golden parachutes of top executives flying away from responsibility like dandelions, landing in multi-billion villas and in Caribbean islands with azure skies and bulging wallets. I have a dream that one day we could stop bloodshed, and mothers of Americans would stop wiping their tears in aprons upon receiving lead coffins, and mothers of Iraqi would cease cleaning tears of desperation and blood from their mutilated sons` and daughters` motionless bodies , nephews and fathers. Would stop cursing the holly land while pulling bodies from rubbles from outrage of a beserk empire.
I have a dream that this country would wake up from apathy of glutting imports, from slow death of bleeding her manufacturing away to the country of rising Dragon or Sakura bough. That she could patch her 12 trillion dollar external debt agony by reigning horses at Capitol Hill whose spending bulimia far outweighs her exercise of fair and real taxes. That she manufacture meaningful items and stop the fountain of negative trade balance slowly passing away her economy in coma. I have a dream that one day we will rinse the burden of medicare contaminated with government subsidies and gluttony of private insurance companies. That one day, people will be blessed for healing, not for finding a pre-existing condition to yield fat paychecks to conglomerate insurers. I have a dream that one day this country would claim back her factories and give chance to workers, not stock holders of Cerberus or hedge funds. That our sons would proudly watch TVs made in her own country, and drive cars built on her own platforms, not rebadged imports. That we would zoom beyond horizon with our own binoculars, and seize the light of stars with knowledge of our fathers and perseverance, not outsourced H1b visa wannabes. That labour unions would repossess the power back to people. That foreclosures sweeping across the nation wouldn`t leave families homeless and banks even more gory. I have a dream that this country would reverse the trend of replacing highly paid manufacturing jobs with subpar paid service jobs. That America wouldn`t take a bow in front of oriental keiretsu apprentices giving wide shores open to transplants and their tentacles of wealth transfer. That once again we would roll up sleeves to vanquish uncharted cosmos , and not concocting Minuteman missile shields and discarding Habeas Corpus. That once again we would stick to the Constitution , and not to the oligarchs and tzars of banking loans. That America would stop borrowing 3bn a day from China and Japan to satisfy her war spree under slogans of freedom. I have a dream that this God -blessed country would stop the mint machine of faux money printout proliferating nothing but condensed inflation and ripping out parity of middle class American households. I have a dream that one day ,education system of this country would benefit the hard working and the talented, who have given their souls to hone their vocation and skills of creation, not the vaporware mouthpieces of eloquent speeches or agile paper shufflers to build card houses to be precipitated in pieces onto taxpayers shoulders. I have a dream that this country , once again gargantuan in her strength of exercising added value industries, will be able to feed her elderly and fulfill her commitment of a 44 trillion Social Security pledge to the ancestors of founding fathers. I have a dream that this country can be united under one song, and that my neighbors would sing the same harmony along, that every verse of the anthem would be understood and approved by our hand on the heart. That a melody would have chorus of commitment to noble deeds. That we would not need to translate, interpret or improvise any of our songs or laws according to audience or degree of deafness. I have a dream that America will not be the shortest empire ever, after fallen Rome, that her aggregate of being empire will be measured by her achievements whether art, forged metal dreams or alchemy of innovation. I have a dream, that one day we will take brooms of determination and sweep the Patriot Act, NAFTA, Amero and The North American Union and OPEC out of our sacred shores along with food stamps, trailer trash , graffiti and sloth, along with our inconsistency , along with illiteracy, and parties, that blindly divide this nation . I have a dream that we can have the grassroots to our conscience, not the Neo-Cons, Dems, or Reps or , left winged Liberals, that we can choose our leaders according to our pleas and needs, not the commercials embellished by Murdochlike six digit inauculations or bribed Diebold machines.
I have a dream, and so can you, a flower that is born to be free unto itself, whether a rose of Flanders, or a tiny forget-me-not on a vast prairie of Montana can not be fenced or withered , for we can stand united, and a flower either blossoms free on a sunlit meadow, or dies. We shall stand united America my love, keeping our forts and bridges of dreams. And none shall pass that is made of doubts. None. For I have a dream.
jurisb….just….wow!
jurisb….. What a wonderfull piece of work.Congrads thats the best comment ever.
Michael
RF : This one needs to be preserved somewhere.
I have a dream that someday, GM will make a car that I want to buy. Then I realize that in the real world, they won’t.
John Horner:
You know, the guy with a Bachelor of Science degree from the Naval College who did graduate work in Nuclear Physics. He never got a business degree, but somehow managed to make the family peanut farm a huge success even without an MBA.
Ha! Peanut farming was (and may still be) one of the more Stalinistic farm programs. It was replete with acreage quotas, price supports, and import restrictions. Until 1981, there were actual prohibitions (yes, here in the USA) on who could grow.
You can dislike the market, but touting President Bugs as a business farming genius is enough to make a lunchroom of Chicago school economists projection vomit.
jurisb
The rose of Flanders? umm Ned Flanders?
Jurisb
Your dream doesn’t need such a long winded explanation. The problem with the economy is too much government. Cut the taxes and regulation and the economy is instantly better.
Look at it this way. You let millions of people make their own decisions about their money or you let the government take the money and a few bureacrats spend the money.
And the post of the year goes to [tearing of envelope/paper shuffling]: Jurisb!
I’m truly torn with this automaker debacle. I do not want to see any of the auto makers die. Well, maybe Chrysler (the Sebring – really, are you kidding?). I joke …
I’m certainly not supportive of any type of low interest loan support for the detroit auto companies in their current forms. With some management shuffles, I would be less apprehensive.
Chapt 11 might be the best way for the Big 3 to shuffle the deck and remove some of the jokers.
However, the top cards would probably not be killed. Considering how incompetent the people at the top seem, I doubt Chapt 11 would lead to profits. Also, Chapt 11 would certainly lead to immediate sales reductions. and therefore make success even more elusive.
Robert: I can’t wait for your “In support of: C11” article.
I’d give them more, at the cost of added restrictions, covenants and conditions. This is a federal program, for the country not just Michigan, Ohio, etc. Moving HQs to locations where truly competitive managerial talent can be hired would be a great start, but that’s politically difficult to provision in a taxpayer bail-out. So terminate the existing Directors and require shareholders to nominate and vote on a new slate exclusive of any current directors. This has to be done before first money in. Stipulate that the new boards must replace at least 2/3rds of executive management, defined as CEO + direct reports. CEOs with more than three years of tenure must be replaced. Also to be done before first money in. Major production of new models financed by the bail-out must be based in the US. Revisions to UAW agreements to make this both possible and competitive must be reached within a defined period. That is to say, put the aid package on the table subject to UAW/Maker agreements to render auto production in the US cost-competitive and give the involved parties 45 days to agree or the aid package is rescinded. This forces companies to publicly affirm the competitiveness of their underlying economics with no, “but we forgot….” excuses, and it forces the unions to a realistic assessment of their contribution to the problem. Can’t get real before 1st money in? You’re not getting bailed out.
Also, each recipient of Federal aid must host and pay for continuing independent audit. The federal government gets three board observers with full rights to speak on the record, and one voting Director in each recipient company.
But Americans have to connect the dots and participate. That means prioritizing competitive Detroit 3 products over others for the aggregate economic leverage wherever possible in their automotive purchasing. Don’t buy the lingering sub-par products, but the mainstream competitive vehicles that are on dealer lots and in the pipe, that will meet personal requirements sans vanity considerations, must succeed on the merits of here and now, not fail on perception and rootless irrelevant fear. That’s up to us. No, your 10, 15, 20 or 35 year old bad experience with maker G, F or C isn’t a good enough reason not to buy a current competitive Detroit 3 vehicle. Have or had a serious problem with your current Detroit vehicle? You get a pass. Everyone else, shut up and deal. Every other automaking country’s citizenry seems to understand this, including Japan’s.
Phil
WTF was that?!?!?
Jerry Garcia ain’t got nuthin on THAT!!!!
Phil Ressler:
“But Americans have to connect the dots and participate. That means prioritizing competitive Detroit 3 products over others for the aggregate economic leverage wherever possible in their automotive purchasing. Don’t buy the lingering sub-par products, but the mainstream competitive vehicles that are on dealer lots and in the pipe, that will meet personal requirements sans vanity considerations, must succeed on the merits of here and now, not fail on perception and rootless irrelevant fear. That’s up to us. No, your 10, 15, 20 or 35 year old bad experience with maker G, F or C isn’t a good enough reason not to buy a current competitive Detroit 3 vehicle. Have or had a serious problem with your current Detroit vehicle? You get a pass. Everyone else, shut up and deal. Every other automaking country’s citizenry seems to understand this, including Japan’s.
Give. Me. A. Break. Aggregate economic leverage? Still with the import bias argument? Most of the ‘lingering sub-par products’ happen to be made by Detroit, just FYI.
I’m not going to ‘shut up and deal’ and buy a product that a) doesn’t meet my needs and b) is sub-par in its segment. I’m afraid taking this kind of tactic is probably the least effective way to rejuvinate Detroit. I dunno – just a hunch. Maybe instead they should try to field a truly competitive vehicle in every segment, you know, how about a decent American economy car? The ‘shut up and deal’ attitude is what got Detroit here in the first place, not some ill-founded, unfair consumer bias. And I don’t want to hear about what’s in the pipeline – I’ll judge it when it’s here. The Cobalt was touted as the anti-Cavalier from day one. So I guess the Cruze is going to be the anti-Cobalt. Let’s not get ahead of ourselves.
Was my Mazda3 purchase simply one based on ‘vanity considerations’? What, pray tell, would you have suggested in lieu from Detroit? The Vibe? The Cobalt/G5? The Caliber? No, no, and eh no. Nothing they make competes. The only one that comes close is a rebadged Toyota. But the Focus does have huge fake fender vents!
The sooner Detroit admits to years (and that means current, too) of subpar offerings (not just in reliability, but overall quality) and does something to correct that, the better off they’ll be. People shouldn’t be forced into buying subpar product to keep ancient, mis-managed companies afloat.
I also forgot to ask – did England’s citizenry ‘shut up and deal’ with their homegrown products?
Give. Me. A. Break. Aggregate economic leverage? Still with the import bias argument? Most of the ‘lingering sub-par products’ happen to be made by Detroit, just FYI.
And I suggested you shouldn’t buy them.
I’m not going to ’shut up and deal’ and buy a product that a) doesn’t meet my needs and b) is sub-par in its segment.
Nothing I wrote suggests you should. In fact, I explicitly wrote that buying what meets your needs and is competitive is part of the formula.
Maybe instead they should try to field a truly competitive vehicle in every segment, you know, how about a decent American economy car?
Well, there are truly competitive Detroit vehicles in many segments and that’s where the personal advantage is conclusive. As for the economy segment, nothing strikes me as a differentiated standout entry. For all the criticism the Cobalt takes, I can’t think of any way in which the Corolla isn’t worse, yet Toyota sells droves of them. The current US Focus, which also takes a heap of criticism here is really only bested by the Civic among conventionally-fueled economy cars. Again, a Corolla is worse in virtually every way. Civic wins the sector and yet more people in the segment *don’t* buy a Civic than do. Cobalt and Focus are competitive in the sector relative to what’s fielded in the US. The economic advantage to Americans is more than marginal.
The ’shut up and deal’ attitude is what got Detroit here in the first place, not some ill-founded, unfair consumer bias.
Detroit originated the problem, particularly in the economy segment, on their own decades ago. But consumer bias has compounded the problem and is partly responsible for anemic response to real improvements. If we’re going to bail out these companies, it only makes sense to go a step further and drop the brand bigotry.
The Cobalt was touted as the anti-Cavalier from day one. So I guess the Cruze is going to be the anti-Cobalt. Let’s not get ahead of ourselves.
Cobalt is leagues better than Cavalier. The actionable data suggests Cruze should have a chance to debut into an open-minded market, not one biased against it for its origins.
Was my Mazda3 purchase simply one based on ‘vanity considerations’?
Only you know the answer to that question. The Mazda 3 is a competent small car. It also happens to offer at least marginal domestic economic leverage given its partial domestic parentage.
The sooner Detroit admits to years (and that means current, too) of subpar offerings (not just in reliability, but overall quality) and does something to correct that, the better off they’ll be. People shouldn’t be forced into buying subpar product to keep ancient, mis-managed companies afloat.
That admission has been made many times over by various personalities from each of the companies in question. Move on. The response is in the newer products. Corrections already in market with more coming. No one, least of all me, has suggested you should buy sub-par products and no suggestion of being forced to do anything has been made. You now have real, credible, domestic alternatives, and it’s in your own interest to see them succeed, particularly if your government is bet $50B or more on their future.
Phil
I also forgot to ask – did England’s citizenry ’shut up and deal’ with their homegrown products?
No, but then the British car industry never fielded comeback cars that were dramatic quality turnarounds like Malibu, CTS, C5/6 Corvette, Cobalt, Fusion, new Taurus, Aura, etc. They simply continued — arguably accelerated — their quality slide after investment, even going so far as to screw up Honda-based products. Had the Brits fielded anything as good as a 2008 Malibu, for instance, relative to the 1980s market, the outcome might have been different.
Phil
Robert,
You mention the Bear Stearns bailout and Fannie Mae, Freddie Mac takeover, but you don’t say whether or not you’d vote yay or nay on those government interventions.
While I’m generally opposed to government subsidies for business, there are exceptions. We can’t import tanks and army boots, so maybe it wasn’t such a good idea to allow our machine tool and shoe industries to disappear in the face of price competition from China and other lost cost countries.
At the NAIAS this year, I got a chance to talk to Sen. Joe Lieberman when the Republican candidates stopped in to take advantage of all the press coverage in a battleground state. I told him that Washington has to care as much about the people who make cars as those who make corn. I suppose, though, that at the public trough the financiers are ahead of the farmers.
Around 13% of the US work force is directly or indirectly related to the big 2.8. Farmers represent less than 2% of the population. How many people work on Wall Street? Bear Stearns’ bailout cost $25 billion. The cost of the Fannie/Freddie takeover will be at least that much. BTW, Clinton honchos Franklin Raines and Jamie Gorelick (the same ex DOJ lawyer who set up the “firewall” between the CIA and FBI that hindered preventing the 9/11 attacks) have made scores of millions of dollars from overstated revenue at Fannie Mae, but unlike the gonifs at Enron and Worldcom, they’ll never see a courtroom, let alone jail cell.
So why should the folks in Detroit count less than the folks on Wall Street or in Iowa?
RF,
Just out of curiosity, given your high standards for “truth” and accountability, are we to expect your resignation if all the predictions of bankruptcy and failure don’t end up coming true? Can we have a clear definitive statement that you will resign for being so wrong for so long if GM survives?? Put it on the line Bubby! You gotta walk the talk!! If you demand it of Rick and Bob, certainly you can demand it of yourself! Well….?
Your dream doesn’t need such a long winded explanation. The problem with the economy is too much government. Cut the taxes and regulation and the economy is instantly better.
….
That’s really funny. We can see how less regulation and tax cuts have helped the Bush years…NO THANKS!! Now let me get the toys with lead paint out of my kid’s hands before he gets brain damage.
Golden,
Could I get an example of the reduced regulation? Even the attempts at deregulation were more complicated than the regulations they replaced. If it was intended to reduce regulation under Bush, it was a botched job.
Landcrusher, here are a few. On environment:
# Froze environmental rules finalized by Clinton, including one to minimize discharges of raw sewage.
# Completely abandoned 62 new environmental standards that were in development.
# Delayed implementation of mining regulations intended to protect watersheds.
# Delayed energy efficiency standards for air conditioners.
# Stalled implementation of rules requiring utilities to reduce toxic emissions from expanded power plants.
# Adopted arsenic-in-drinking-water standards 10 times higher than the EPA’s own scientists considered acceptable.
# Stalled cleanup of tons of toxic PCBs dumped into the Hudson River by General Electric.
# Relaxed nationwide permit rules so coal companies, developers, and others can fill in thousands of streams, swamps, and other wetlands, without public notice or comment.
# Refused to support reinstating the tax on polluters that had long funded the cleanup of Superfund toxic waste sites.
# Opened Missouri’s Mark Twain National Forest to lead mining exploration.
# Killed funds to support environmental education in public schools.
# Ruled that commercial overfishing in New England waters could continue indefinitely.
# Doubled the number of open pit limestone mines to be opened in the Florida Everglades.
# Reversed a 25-year-old Clean Water rule that prohibited the disposal of mining wastes in streams, rivers, and other waters.
# Expanded oil exploration in Colorado’s Canyons of the Ancients National Monument.
# Surrendered federal water rights on public lands so the Western states could use them for private purposes.
# Killed funding for program to help farmers convert some of their land to conservation.
# Cut the civil penalties that polluters have to pay by half.
# Withdrew Clinton rule requiring cleanup of polluted rivers and substituted a voluntary program.
# Shut down the Everglades Restoration office.
# Reneged on agreement to protect endangered desert tortoise.
# Reversed snowmobile ban for national parks.
# Issued ruling allowing more air pollution at Mammoth Cave national Park.
# Weakened whale protections that hinder oil and gas industry.
# Reneged on manatee protection plan.
# Backed off mandatory plan to clean up storm water pollution.
# Backtracked on land preservation policies.
# Opened millions of acres of wilderness to energy development.
# Rejected a program that would have significantly controlled mercury emissions from power plants.
# Cut wildlife protection and boosted logging in Northwest forests.
Worker Safety: OSHA agency head Edwin Foulke Jr, Bush appointee pushed “voluntary compliance suggestions” in lieu of regulations with teeth.
Interesting to note is that when Bush was campaigning in 2000, he actually supported the Clinton assault weapons ban, a misguided, stupid ban if their ever was one.
Just the tip of the iceberg. Could have focused on many area, just chose these because I knew where to look quickly. I want to state that regulation is not the end all to everything, but really, voluntary compliance when proper protection costs big bucks? Not going to happen.
G2H,
Sorry, You missed your chance by throwing out a lot of politically loaded stuff. I am not buying.
As far as I am concerned, it doesn’t matter if they half the fine, stop enforcing, or anything else. If the law is on the books, it is still there. If I still have to send in a form, nothing changed. If compliance is voluntary, all you changed was the chance that you might get caught. For those who don’t want to go foul of the law, there is still WAY too much regulation in this country. For those who cheat, there is never enough.
I can’t quite buy a reversal of a snowmobile ban in national parks or reconsideration of a manatee protection plan as examples of deregulation.