The Freep reports that Obama’s Car Czarlet, Steve Rattner, is steering his Presidential Task Force On Autos away from earlier considerations of bankruptcy for GM. “Bankruptcy is not our goal,” Rattner tells the Freep after a week of Kool-Aid sampling in Detroit. “I’ve been in and around bankruptcy for 26 years as part of my private-sector work. It is never a good outcome for any company, and it’s never a first choice.” And by turning away from bankruptcy restructuring, the PTFOA has eliminated the only real possibility for comprehensive, radical changes to Detroit’s business model. The result? Don’t expect a single major turnaround effort to tackle Detroit’s unsustainable posture.
Instead, “it’s entirely possible, in fact I think it’s more than likely, that what you will see is not a single announcement at a point in time that’s the beginning of the end of our policy efforts for the auto industry, but rather a series of actions over perhaps a reasonably long period of time to solve this problem,” says Rattner. And why not? Every good parasite knows that a slow bleed keeps the host alive longer than massive feeding binges do. As the man detailed to keep Detroit rumbling along at a minimum cost to the President’s political capital, Rattner knows that massive federal cash infusions create controversy without ensuring long-term viability. Hang on for a long slog, folks.
“…a series of actions over perhaps a reasonably long period of time to solve this problem,”
Translation – “We want to kick this can down the road about 4 years. Let the next guy deliver the bad news”.
Good luck with that plan, guys.
There has never been a federal agency or (in this case) quango that put itself out of business.
At best, the PTFOA would pull the plug on the automakers and then hang around to do other stuff (e.g. coordinate fuel economy and pollution standards, retrain workers, establish more boondoggles for afflicted communities, etc.). Clearly, this is the not the best case scenario. Not by a long shot.
I feel sorry for Ford. By keeping GM and Chrysler on drip feed, the one domestic with a shot at making it (relatively) on its own is being starved, kicked and dragged into the mire.
Politics, eh?
You can almost hear them. Management (if you want to call it that)smiling and nudging one another in the elbows, saying:
“See, see I told you so. They won’t let us die and our salaries and bonuses will go on forever”
@Lokki:
Even worse – 8 years.
Bankruptcy is not an option (unless there are some hefty government funded payouts to the UAW)
This is a payoff for the UAW’s support of the Democrats. Taxpayer pickup tab.
Play this economy right and you could end up very rich.
Was George W. Bush paying back the UAW when he bailed them out to begin with?
Was George W. Bush paying back the UAW when he bailed them out to begin with?
The Dem’s had the votes to do this anyhow…. I believe even enough to override a veto.
Remember that they’ve had the Congress for the last few years.
I think George made the right call at the time. It would have been adversely viewed as playing politics with the economy and it was going to happen in the end anyhow.
Funny how people forget that we have a Congress…. even Obama can only wish that he had enough power to ignore Nancy Pelosi and Harry Reid.
If the bailouts (the automotive bailouts in particular) continue it will be 4 years, not 8.
When you try to make everyone happy you end up making nobody happy.
This isn’t going to make the UAW happy. With month-to-month bailouts there are still going to be layoffs, sales and market share are still going to continue on their dive, and the companies will still face a day of reckoning in the future.
And it is going to make everyone else very unhappy. I think there is finally a pretty strong perception in the public that bankruptcy is required, and that bailouts alone are just delaying the inevitable.
Obama knows that the bailouts are bad policy, but he thinks he needs to do them for political reasons. That is a mistake.
History remembers people that make correct, but politically unpopular, decisions very well. It remembers people that make bad decisions for political reasons very poorly.
Lokki:
The auto bailout loans failed in Congress, so there were definitely not enough votes to override a veto.
Bush came up with TARP and supported the auto bailouts (technically the auto bailouts are part of TARP, since Bush used money that, by law, was only supposed to be used for financial company bailouts to fund the auto bailouts) for the same reason as Obama is continuing both programs, political fear.
In the end it may have cost McCain the election.
How disappointing. We need someone with insight and wisdom. And we get Steve Rattner.
Rattner is Pinch Sulzberger’s tennis partner.
The GM/Chrysler bailout is a UAW payoff. And Bush was jsut playing kick the can down the road. In a month its your problem.
no_slushbox: You may want to check your timeline… didn’t Obama get elected in (very early) November of 2008… then Bush decided to use the TARP funds to “help” the automakers in Dec?
Unless you mean he lost the next election for John McCain as well…