According to the silver-lining seeking scribes at The Detroit News, the Presidential Task Force on Automobile is taking the long-term view on the Motown meltdown. Hang on. Didn’t DetN scribes Gordon Trowbridge and Christine Tierney read Daniel Howes latest column? You know, the one where Mr. Howes called bankruptcy deniers “deluded.” And yet, less than twenty-four hours later, the word “bankruptcy” appears in the DetN’s Task Force article exactly none times. Instead, there’s a hopeful assumption that the Obama admin wants YOU to support Chrysler (maybe), GM (definitely) and Ford (maybe) for as long as it takes to . . . well, we’ll get to that in a minute.
The federal auto task force that arrives in Detroit on Monday has spent the past two weeks meeting with a range of industry players, pushing its work beyond the automakers’ immediate cash crisis and strongly hinting at a longer term goal… the group’s focus appears to extend far beyond the balance sheet, looking more deeply into the question of what a successful U.S. auto industry would look like in the long run.
Yeah, that’s what I want: a gaggle of professional politicians deciding what the American auto industry should look like under a new five-year plan. So, how much is this boondoggle going to cost me? As the DetN points out, it’s not all about money (even though it is). DC’s going to make sure there’s plenty of green in that mean, mean, mean; mean green.
. . . the White House sent strong signals this week that it is considering energy and environmental issues alongside financial matters. White House officials said discussions of a single, national greenhouse gas standard, which could supersede attempts by California and other states to set their own standards, are part of the restructuring process.
As we’ve pointed out many times, Detroit ain’t gonna take a free ride. If congress stumps-up a $34B “loan” for General Chyrsler, they’re going to demand that their beneficiaries let nature sing. Clearly, Detroit’s automakers are keeping bad, bad company; ’til the day they die.
I wonder who will be back more times for federal cash, GM or AIG?
Obama looks to be just as incompetent and foolish about the carmakers as Bush. His task force is led by Larry Summers, Tim Geithner, Steve Rattner, and Don Bloom. What do any of them know about running a (non-financial) company? About turning around a bankrupt company? About the carmaking industry?
Don Bloom knows a little about the industry, or at least the unions. The rest of them know nothing. Nor do they know anything about bankruptcy, or about turning around troubled companies.
George Bush’s decision to bail out the carmakers that marked the first time in American history that the federal government paid a private company’s operating expenses. (Chrysler under Iacocca was quite different, as are the bank bailouts.)
Once that incompetent fool left the White House I thought we would see some competence and wisdom to replace him. At least on carmaking, Obama is as bad, if not (due to his pipe dream about green cars being the answer to industry troubles) worse.
God help us all.
I have to agree with Robert’s last line about the D3 keeping bad, bad company and with tesla DW’s opinions as well about the lack of real-world business experience possessed by the Auto Task Force.
Looking at the so-called Task Force makes me wonder about the differences in mindset between those that understand ‘economics’ and those that understand ‘business realities’.
I don’t know who will come to the trough more, but I bet AIG has better skills at actually getting more money.
I still wonder why no one seems to question the real value being provided by companies like AIG, and demand systemic changes so that the economy actually gets a value back that is greater than what these magicians suck down.
They should also have broken that bad boy up a while back.
Also TeslaDW, this is just the result we will always get if we continue to have such a poor level of discourse in our country that people actually believe that if one party is wrong, the other one must be right.
D3 is owned by Carol Browner now.
Voters are too stupid to live free.
I was hoping for better from Obama with the auto industry issue, but expected more of the same.
Please just go bankrupt already. It really is just pride at this point. Christ almighty.
Three words stand out above all others.
IMMEDIATE CASH CRISIS.
What about those privately owned, competently run, “no bail out necessary”, American companies which compete in the insurance industry with AIG?
They all are clearly and massively disadvantaged by the fact that AIG is getting more and more money from both them (through taxes) as well as prospective clients (through taxes). But this is how the world works now, isn’t it?
Likewise, successful and well run automobile companies which have been busy sending good jobs TO the United States (as opposed to sending them to Mexico, China and elsewhere, as Detroit Inc has been doing over the past couple of decades) are penalized by the bail out of Detroit Inc., in the same manner. Does it matter that the HQ’s of these companies are in Germany (BMW), South Korea (Hyundai-Kia) or Japan (Toyota, Nissan, Subaru, Mitsubishi*, Honda, Mazda) *not so well run as others I admit
Here’s what the Brits call some home truth for you all in TTAC B&B land.
A government which has to be so controlling of everything that it cannot let normal business cycles occur, and which is so controlling of people’s mindsets that it demands PCness over common sense, is a government which is unAmerican. It stands completely in opposition to what, historically, could be referred to as the American way which involved many positive aspects of understanding what human nature is like (in all of its negative AND positive lights) and fashioning a government which tried to balance individual freedom successfully with limiting the freedom of bad characters to do their craft. Good summary?
Did you catch that? I didn’t say Americans were better peoples than others. I didn’t even say that Americans were harder workers than others, though this was once the case because part and parcel of a successful civilization is allowing as much freedom (within good bounds agreeable to the culture), allowing as much wealth creation to be kept by those creating it at all levels of that creation (using normal, bad, human greed and tempering it for the greater good), limited government (not soaking up all of the wealth in make-work, bureaucracy and under the table hand outs to political cronies), not constantly spending the nation’s money and manpower in wars, and finally, HONEST MONEY (which essentially is the foundation of economic stability – duh!)
So, what does the now torn and shredded United States Constitution actually SAY about HONEST MONEY? You know, the part ignored since 1913? It says that Congress shall have the power to coin money. What about the other part, ignored since 1971 and at several other times in the history of the US, too? It says that GOLD and SILVER SHALL BE the money used within and between the various states. Doesn’t say “gold and silver backed paper or electronic money” but it obviously could be adopted to that end legally, through previous precedences in the US. The object of the exercise was to limit the normal, evil minded like everyone else, people sent to Washington from doing invisible taxation by inflation, hiding tax uncreases through inflation, and ruining the country through it. The Constitution also originally stated that the US should tax imports and consumption, NOT INCOME. Think that one through – how different things would be had we continued that good advice.
The un-American opposite of what I just wrote is exactly the same kind of government which millions of men and women fought to keep OUT of this country, often by giving up their lives in the process. I myself essentially see that I WASTED four years of my life volunteering for the military, since my efforts were undermined here at home all the while, the fruits of which we now see.
It’s exactly the same kind of government which has been placed in other countries over the last century, and which were responsible for more deaths by murdering their own citizens than wars were. Stalin was responsible for murdering as many as 55 million Russians, Ukrainians and others under his control; Hitler was a mere amateur – 6 million Jews and 5 million Christians, Gypsies, etc., there was Idi Amin, Pol Pot, Mao (only God knows how many millions or hundreds of millions HE killed of his own countrymen), but America can’t brag much – we’ve murdered over 50 million in this country since 1973, along with almost all other nations of the world over a similar timeframe. The blood of innocents is on all of our hands because we have not risen up and stopped it. Ironic that “lefties” rise up if one baby seal is killed, but don’t mind murdering their own babies (and encouraging others to do so) in an abortuary. But evil doesn’t have to makes sense.
When looked at honestly, this unAmerican system goes by several names;
National Socialism (Naziism)(medical experiments on prisoners of war; elimination of the elderly and crippled – kind of like Terri Schaivo of Florida, “legal” euthanasia in Oregon). Don’t have a car accident with no family around in Oregon…. eh? Or get old and frail…
Fascism (Italian and Spanish versions of Naziism)
Socialism (a word play on what is only a temporarily watered down version) = Venezuela now = epic failure, and to a slightly lesser extent/different variations in Europe and the UK, current day China and Vietnam
Communism (as done by Russia and Eastern Europe pre-wall-fall, pre-1990’s China and Vietnam, and loony tunes North Korea now)
Why does roughly 28% of the US adult population feel the need to have a nanny-state decide how they must think, look after their needs from “cradle to grave”, all the while destroying what was a great nation? Truthfully, virtually ALL of “higher education” in this country is this mindset.
Darned if I know. I call it “infantile behavior” “emotions overruning sense” and “adultalescentism” – essentially spoiled brat children in adult bodies.
But if you think that 27% of the US adult population is pro-American because they voted for the opposition major party, you’d actually be assuming too much good about them and that party, which is also as bad an epic failure for the pro-American way of life, just in slightly different ways.
So Landcrusher, you kind of said a lot in “this is just the result we will always get if we continue to have such a poor level of discourse in our country that people actually believe that if one party is wrong, the other one must be right.”
When 28% of the voting adult US population wakes up to these facts, pulls together in the same direction and starts voting, things will change (unless voting is essentially rendered irrelevant – let’s be honest, voting honesty is not exactly a known quality of “Chicago politics” and if we’re honest with ourselves, we’ll notice many things about the already epic failure current President and administration which stinks to high heaven).
Our children, our grandchildren and great grandchildren are going to spit on our graves and curse us as a people, for doing what we are now doing to them. I won’t even couch it in lies like “allowing to be done to them” because it’s time we owned up and took responsibility. We’ve actually voted fools into place over decades. We’ve refused to see how we have been lied to in thinking that there is any essential difference between these two major parties. In fact, the powers that be only leave a few minor outer changes, highlighted by a media essentially controlled by parties in one form or the other, to divide and conquor the people into voting for them. This keeps the sheeple from thinking outside the box and voting for empowerment of the people instead of the few. This voting the power of the the people back into play is only available through 3rd parties, such as the Libertarian and Constitution parties. If it were available through a major party, we’d SEE the REAL changes periodically, wouldn’t we? Never mind what people SAY; what is it they DO?
Albert Einstein once said that doing the same thing over and over and expecting a different result, is one definition of insanity. It’s time to man up and sane up, America. Then the real work begins as we jointly have to hire folks smart enough to undo all the damage and set us on a safer course, which we can plot from maps already written by our forefathers.
Once we figure these salient facts out, we can then move forward for REAL change (BACK to what this country was founded upon). Until then, we’re simply getting ShortChanged. Again. Still.
Another uncomfortable fact to ponder is that statement by the founding fathers which said that the United States Constitution was ONLY suitable for use by a religious peoples, free to worship as they pleased, and that this sub-foundation is all but now washed away in this country.
So until there is a widespread, yet individual spiritual Chapter 11 reorganization and renewal of people’s minds and souls, none of the other can follow, according to those founding fathers who obviously knew of what they wrote. Otherwise, it’s Chapter 7 for religious freedom and conscience in this country, just as is the case in many other evil nations of the world.
It seems impossible to do all of this; it’s like a project of mine at work right now, helping to ID some 6000 photos of cars from the 1900’s through current day. If it look at it as a group of 6000 pictures, I’ll give up before I start. It’s too big of a job. If I look at only the 25 or so photos on a page, pop them up (enlarge them) one at a time and do it that way, I will eventually get it done in a few months…. yet I am still mindful of the 6000 photos, it’s just put aside so as to not be a stumbling block!
Normally, I could care less about a company going bankrupt or selling out to another company. But I don’t think the fact we are in a credit crisis should be allowed to dictate when/where a car company does go under.
The other countries are HURTING TOO. Every single car company is posting losses on a month to month basis and it only makes sense that our domestic brands take the hit hardest.
And for all of you anti bailout knowitalls, each time a bank goes under, AND over 146 of them have fallen int he past few years, it costs the FDIC millions and later billions in the end. One way or another, we end up paying for it.
All of you people out there who scoff at Obama, or Bush, or Pelosi or Frank, etc make me laugh.
America has NO COMMON GOAL anymore and our people are divided among racial, ethnic and now – idealistic lines.
HOW THE FK DO YOU THINK WE WOULD HAVE A GOVERNMENT THAT ISN’T MIMICING THE PEOPLE THEMSELVES?
Our government is nothing more than a reflection of the people who voted for them. What’s funny is, the public NEVER TAKES RESPONSIBILITY FOR ANYTHING. The Credit Crisis was blamed entirely on greedy brokers and billion dollar theiving CEO’s but no one ever took responsibility for #1 borrowing more than they could pay back, #2 having shitty jobs that they couldn’t use to pay their loans, #3 being credit unwaise all the time.
THE PUBLIC SUCKS and it will only get worse.
THE PUBLIC SUCKS and it will only get worse.
I’m with you on this….
The mess that we’re in isn’t a political problem, religious problem, money problem, etc. IT’S A PEOPLE PROBLEM!!! Always has been, always will be.
Any good idea or concept by itself isn’t necessarily bad. It becomes that way when you introduce a catalyst (PEOPLE) into the mix.
People will f*** up a wet dream when given the chance (with very little effort)…
I think menno has read Atlas Shrugged more than once.
Socialist, fascists, and hard lefties are making a move right now because once most people get wind of what is going on they just might lose a branch of government or two in 2010. Then we get to watch Obama suck his thumb in the corner for 2 years.
There is quite a lot of buyers remorse with the Messiah. Of all his areas of interests, running car companies for profit is probably near the bottom. Running green car companies is not even a good idea, for few people want to pay too much for a craptastic car that barely pays for it’s outsized costs in 175K miles.
Detroit is really doomed. I think Ford will be the last one standing, and I’m going to pick up a few shares on Monday and see where they go.
Wow, menno, that rant makes me think there might be a place for a viable third party after the second of the two major parties eff’s up just as badly as the first. As one wag put it, I knew it would be a trainwreck, but I didn’t think it would happen before they left the station.
Flashpoint, vento – sorry, I ain’t putting on no hair shirt and taking up the whip. I didn’t treat my house as an ATM. I didn’t overextend on credit card debt. I didn’t vote for the current occupant of the WH, although I concede that the alternative wasn’t any prize either. I pay income taxes, a feat managed by roughly half the wage earners in this country, likely to trend lower under Obama. We have reached the tipping point where half the populace consumes taxes and half produces them. Its rational behavior for the tax consuming half to look for even more. Not all do, God bless them. If I could afford to go Galt, I would. As it is, I’m cashing in some insurance policies that will give me about a years expenses, absent high inflation.
Chuck R
Honestly, I am against the public school system. Its being used as a daycare center…a social welfare daycare center. Its no better than a welfare check to parents.
The schools are failing…the kids are fcking idiots…they show up and achieve nothing but materialistic behavior – with cellphones and clothes…
The republican party would love to abolish public (everything) and make everyone fight for everything. No more welfare, no unemployment benefits, no public services…etc.
I can’t say I disagree with them but, the truth is, we’d end up just like China. out of their 1.5B, a whole lot of em are dead broke and begging on the streets everyday. The only ones you see till you actually lived there are the 15% or so who work, and live in the cities.
Few here want to admit that the government is the silent (sometimes not so silent) partner of us all through the tax code and obligatory payments such as unemployment, social security and medicare et al. We affect the government no matter what we do/do not do. And the government affects us by what it does.
The idea that letting major corporations fail without regard to the consequences is good is wrong. There will be consequences and expensive ones. The judgement call that the powers that be are making is which is cheaper, bailouts or not.
And what is the likely outcome of each.
The mistake was to let the corporations grow to the gigantic size they did. It was all done with good intentions just as those who now recommend the “free market” solution have good intentions. But there will be a price to pay.
If GM, for example, is downsized, rationalized and restructured in bankruptcy there are serious implication’s for the government which is collecting a lot of tax revenue from its workers and its supplier’s workers. True, in time it will all work out, but the chaos and loss of revenue will come under the watch of the current administration who will likely have to take some of the blame. Already Republicans are trying to tie Obama to the current depression even though he has been in office only a few weeks and the whole thing started in 2007.
And if the UK is the model for letting the car industry go, I do not see that the outcome has been particularly beneficial. The UK is in worse financial and employment straights than we are.
All the choices are bad. It is a system failure and can only be remedied with changes in the system. What those changes should be and how to implement them is the question.
Foreign car companies are not wholly innocent is this matter because they operate under different rules in their home markets. If they are going to be the new survivors, it means our system has changed whether we like it or not.
And the new order will not be one of our making. It will be one imposed from abroad. Is America ready for that?
Wow, menno, that rant makes me think there might be a place for a viable third party
Yeah, some actual leftists would be nice.
I don’t think Americans really understand what a rational social democratic platform is because the Republicans have them so terrified of the inevitably half-assed version the Democrats cobble together.
The US needs a real Left so that a) the Republicans can be the Nazis they seem hell-bent on becoming and b) the Democrats can lose that pesky social conscience that holds them back from being the corporate whores they so desperately want to be.
Perhaps, just perhaps, 97Escort, some of the problem lays with the fact that we as a culture “allowed” corporate entities to grow like weeds, and choke out the better smaller companies due to advantages given by legal means.
Look at the history of the automobile industry; I’ll keep it real simple and give on example only.
Ransom E. Olds started Oldsmobile in the 1890’s, had a disagreement or two with other management (I think even before Generous Motors came into the picture and bought Oldsmobile to put into a conglomerate), and left to start a new car company very early in the 20th century. He used his initials, REO.
Yes, REO was established in Lansing, Michigan, same city as Oldsmobile; REO built good quality cars, but never merged into a conglomerate. In fact REO built excellent quality cars – and also trucks – which were so good, that the cars lasted significantly longer than the competition vehicles.
Here’s the interesting tale. REO developed a self-shifting transmission – no clutch, no shift lever, no need for synchromesh to replace straight gears (crash-boxes were aptly named). The company started producing the Self-Shifter in 1934, introduced in the middle-class Flying Cloud line and also the Reo senior luxury line, too.
We would call this an automatic, which comes from the 1940’s and 1950’s term “automatic shift”.
Now, Reo was continually pushed aside in the auto business world because they were smaller; because they didn’t build cheap crap which wore out in 70,000 miles and needed replacing; because they didn’t have a massive conglomerate of other car companies to help with development costs, etc. In fact, as a member of the Society of Automotive Historians, I’ll add that for the most part, SMALLER car companies have been the innovators. Virtually never GM, Ford or Chrysler, Nissan, Toyota (the hybrid system being the exception), or other large companies.
Reo ended up ceasing auto production after 1936, and concentrated on trucks, until about 1973, when they ceased production. They’d been bought by a conglomerate in 1957 and merged with
Diamond-T to form Diamond-Reo at that time.
The point is this; if you go to read the “official” history of the automatic transmission, you’ll find NOTHING about the Reo Self-Shifter but will find reams of information about Oldsmobile’s “Safety Transmission” for 1938 which became the General Motors Hydramatic from 1939.
To the victor goes the spoils and also the ability to literally re-write history.
OF COURSE letting our oversized and bureaucratic corporations FINISH failing is going to be expensive. It’s literally too late to say “ok maybe we should have some kind of restrictions on the size of conglomerates so that if they fail, it doesn’t cause the ruination of the economy.”
But we CAN say that for the future, if we choose to. Can’t we?
As for a new order, we may have less say than we want. But as things stand right now, We The People just are asleep at the switch, for the most part.
For blame in this whole mess, we need look no further than the mirror. But this blame extends to almost all of us.
Good can come out of it IF we learn and change behavior.
I hope this is the case! Looking at human history, I find that humanity rarely does so in these circumstances. But it’s not impossible – yet.
It’s like I stumbled into a meeting of the John Birch society, and it is a good thing too. I now know that helping out the auto industry due to fears about what a sudden failure might mean for the overall economy is the beginning of a Nazi takeover of the United States. I am still a little unclear about when Obama starts building the death camps. I wonder whether they will just come after the jews or whether internet loons will also be rounded up.
Alan Greenspan, a Rand follower/”free market” fanatic was one of the biggest culprits in this mess and now the Wall St. elite and their $50,000 millionaire useful idiots are are blindly parroting the same ideology that even Greenspan admitted has been shown to be totally flawed.
We’ve been following right wing economic ideology for twenty-eight years, and all we (the middle class) got for it was toxic assets, stagnant wages, imported Chinese crap, budget deficits, failed banks, ponzi schemes, and half-built condos in Florida that nobody wants.
Any rational person can see it’s time for economic libertarianism to take a dirt nap and join orthodox Marxism in the dustbin of history.
qwerty
No need to skirt so close to Godwin’s Law there. Helping out the banks and car companies by essentially nationalizing them is a good start towards a failing and stagnating economy. I am already embarrassed by what we are leaving to our kids. If we all own the big dumb companies, then we have no interest in the allowing any upstarts to enter the market with new ideas. We will become like old Europe, living on memories of past glories, but without the cultcha. Some other mecca will arise for those who have an idea they can’t let go of.
BDB – there hasn’t been economic libertarianism is this country since the first Roosevelt and his trustbusting. What there has been is badly mismanaged and co-opted government regulation.
“BDB – there hasn’t been economic libertarianism is this country since the first Roosevelt and his trustbusting. What there has been is badly mismanaged and co-opted government regulation.”
The orthodox Marxists always tell me that the Soviet Union wasn’t “really” Marxism-Leninsm, either.
Twenty-eight years of de-regulation and tax cuts (from both parties) may not have gotten us back to pre-TR (and you should thank your lucky stars they didn’t) but they’ve gotten us back to the 1920s.
Read it over and over again, because it’s reality–the housing and financial crises were caused by de-regulation.
qwerty
No need to skirt so close to Godwin’s Law there.
That was precicely my point. The absurd characterization of auto bailouts as being akin to National Socialism in comments above destroys any possiblity of rational discussion of the subject. That is the point of Godwin’s Law.
Qwerty, the Godwin of the right is to shout “SOCIALIST!” whenever somebody advocates any government intervention in the economy outside of the military.
BDB:
There is a fundamental difference between the goals and priorities of government officials and the goals and priorities of people whose sole motivation is making a profit. (As “evil” as that may sound.)
So let’s change the debate here. In terms of the Detroit bailout, what kind of government intervention do you favor? Specifically…
1. Should the PTFOA tell Chrysler and GM what type of vehicles to build?
2. Should the PTFOA oversee Chrysler and GM management’s other decisions? If so, how? All checks over a certain amount? Quarterly review?
3. Should the PTFOA be able to make significant management changes?
If they want government money, yes yes and hell yes to the third.
If they don’t want to do any of that, they go into Chapter 11.
Right now we have the worst of both worlds.
BDB
You haven’t answered the question about methodology. How should the federal government oversee Chrysler and GM’s decision making process?
And are you aware of the British Leyland debacle? How could Uncle Sam avoid a replay of history?
When a Navy ship runs aground, doesn’t matter who is OOD, the captain’s career is over. It is a discipline that works. This suggests that one piece of the methodology is a chop that starts at the top and extends downwards for several layers. Why do we buy into the idea that the guys who have run the companies into the ground are the best, the brightest and the onliest?
Then there is the plight of our tax-dodger Treasury Secretary, who can’t find enough of the best and brightest to constitute his senior management. Again, he’s recruiting from the people who have given us an epic fail.
New blood may not save the car cos. or the banks, but old blood will surely be the death of them.
RF–
If I knew how they should do it I’d be the Car Czar. But shuttering the most unprofitable brands and culling the number of dealerships would be a good start. It would be a lot easier for the federal government to do both those things (especially the latter) than it would be for the current crew. When GM/Chrysler return to profitability, privatize them.
Like I said either nationalization with government money or no government money and C11. I’d prefer either to what we have now, wouldn’t you? Namely, government money to private hands with no strings attached while the companies continue to be run into the ground. We’re spending taxpayer money just like we would with nationalization without any say whatsoever.