With what one hopes is feigned incredulity, the Freep‘s Sarah Webster marvels at how political the issue of GM’s bankruptcy has become. “I must confess,” writes Walker with a conveniently wide-eyed naiveté, “I was quite surprised when the issue of whether General Motors Corp. or Chrysler LLC should file for bankruptcy took a turn to the political when the automakers first approached the federal government for a rescue package last fall.” Yeah, it’s a shocker alright. But why is Walker so surprised?
Because most folks in Detroit have known for some time that GM and Chrysler can’t pay their own bills without federal assistance. They are, essentially, bankrupt. Consequently, they are forced to do all the things that bankrupt companies do, such as renegotiate debts, sell assets, restructure or liquidate — with or without a formal legal filing in bankruptcy court. Whether they file for court-protected bankruptcy or not, it’s pretty clear they will have to do all of the above with taxpayer cash, since banks aren’t offering risky loans anymore.
Since whether or not GM enters bankruptcy protection is “a wash” in Webster’s mind, there’s no possible reason for not supporting the fine work of funneling tax money into the whirling malestrom that is GM.
The task of praising these ongoing efforts fell to the Freep’s Tom Walsh though, whose piece lauds the panel as being “up to the task.” How does Walsh know?
It rolled out a $5-billion program last week to keep critical auto suppliers from collapsing and is expected to deliver progress reports on the status of General Motors Corp. and Chrysler LLC in the next few days, ahead of a March 31 deadline laid out in the terms of $17.4 billion in federal rescue loans to the two automakers.
And what does Walsh await from these fine public servants?
Expect acknowledgment that the companies have cut costs and made progress with the UAW. Presumably, that will be enough to allow the companies to keep the $17.4 billion they’ve already received. But future aid may be tied to completing deals with labor and bondholders… this group doesn’t seem inclined to just keep kicking the can down the road.”
Except that kicking the can down the road is exactly what Walsh is praising the PTFOA for. Allowing GM and Chrysler to keep their bailout money while kicking conditions for the first round down the road to the second round plays well in Detroit, but how does it bring the flow of federal dollars closer to an end? After all, the PTFOA’s Steve Rattner has already said that Detroit needs more than anyone has admitted so far.
Simultaneously decrying the politicization of GM’s “restructuring” while heaping praise on its most polarizing features is a delicate balancing act for even the Detroit Free Press. Especially when Ford is making all of the same union and debt reforms with no government money and more success, as witnessed by news that its debt buyback is oversubscribed.
But automotive journalists don’t earn their press junket meal tickets by cutting down the industry’s united front. Our job is to heap breathless praise on the latest pony cars a la Angus MacKenzie’s recent menáge a quatre with “the best ever pony cars.”
Except that just as the press acts as the Fourth Estate of government, checking excesses and reporting scandals, a healthily critical automotive press corps provide the tough love that automakers need to keep their sprawling businesses focused and successful.
MacKenzie, like the Freep, probably thinks of himself as the champion of the American biz when he pronounces that “20 years from now we’ll be calling these the glory days.” But by wallowing in Detroit’s muscle-bound past, Mackenzie merely flatters the worst instincts of America’s directionless automakers precisely when they need a gut check. Now, more than ever.
They can’t be bankrupt yet… Apprently as long as I have money, they have money. So sayeth the government.
Yeah, it’s more than a little backwards minded that GM and Chrysler put tons of dough into their pony cars, which will compete for maybe 150,000 sales a year (in a decent economy, anyway). Meanwhile neither company has a decent compact car, GM has only one good midsize sedan amongst all of its brands (okay, maybe the Aura qualifies, making it two) while Chrysler has none, and both companies still seem to be counting heavily on trucks to bolster their bottom line. GM has way too many brands under their corporate umbrella, and Chrysler seems to think that Fiat is going to be their key to the future even though there is already too much competition amongst too many brands in a slowing market. GM needs to keep the Camaro on the down-low a little better and prop up the Cruze, build a better Aveo, and get the Volt to dealerships ahead of schedule and below the $40,000 price tag if at all possible. Getting handouts of taxpayer money is bad enough. Touting exactly the type of gas guzzling signs of American excess that got the American auto industry in this mess —while Japan took over the best selling sedan segments— makes it infinitely worse. GM, Chrysler, get your shit together and put your toys away, it’s time to focus on the cars that are going to put your ledgers back in the black.
They should make three kinds of vehicles .
Pickups – still a decent need for them but maybe smaller trucks like the ranger or S-10
Station Wagons – replace the SUV with something that gets better mileage, is able to be built on the same lines as a sedan, and take the same parts.
Decent small cars. Even at a loss, these are cars people end up in for commuting, city living, first cars, second cars.
GS650G :
March 23rd, 2009 at 4:35 pm
They should make three kinds of vehicles .
They only need to make one kind of vehicles: ones that people want to buy.
How? Stop the bailout, and they will figure out themselves.
What they need to do to sell cars is use China’s trick, start a new brand with new dealers and name the car Toyoda. 50% of the people buying the cars won’t know the difference.
Supbad75: “away, it’s time to focus on the cars that are going to put your ledgers back in the black.”
@Supbad75: Sadly, if you take pickups and SUV’s out of the equation, these are the only cars that stand a chance of coming close to earning a per unit profit … and the D3 know this…