Friday, December 5, 2008

Nine Questions About The Big 3 Bailout

A few questions about the Big 3 bailout....

1) After being thoroughly chastised for arriving in D.C. in private jets for their first Subsidy Session, the Detroit CEO's appear to have learned the value of The Meaningless Symbolic Gesture. I think they all pulled into Washington in hybrids this time, simply because cars that run on BS, rhetoric, and moonbeams haven't been invented yet and were unavailable.
Anyway, question #1 is.... since corporate jets are, by almost any standard, nothing but an ego boost, are the Big 3 automakers going to sell the jets? Should there be a string attached requiring them to get rid of them, if the jets were a dealbreaker in the previous episode of Dancing For Dollars?

2) How many American automakers have already gone out of business? Is there something special about these three?

3) Companies based overseas who have opened auto plants in the Southeast appear to be doing ok. When is the last time someone got drunk enough to open a major automobile factory in Detroit?

4) Are all industries in need of a bailout based in "Blue" states? Just curious. Wondering if there's a correlation between worldview and business practices.

5) The United Auto Workers gave the Obama campaign 80 million dollars. I'm sure there were no strings attached. Obama has resigned from the Senate so he won't have to vote on this. The only sane way to bail out the Big 3 (without requiring another bailout in 20 minutes) will be to rip up the current Union contracts. Do you think some people are going to be, um, pissed?

6) A lot of people are pointing to the success of the previous Chrysler bailout , the one engineered by Lee Iacocca. Did that do any good, or did it just postpone misery?

7) I have a four year old F-150. I've taken good care of it. But I've already had to put $1,800 into it, and another $2,000 is probably on the way.
Every time I go to a dealer (the backbones of our small towns, the economic linchpins of our communities, blah blah blah) the repair quote is higher than the price charged by a smaller shop.
The other two vehicles in my Earth-Warming Fleet are imports, or should I say, their parent companies are Japanese. These cars haven't needed any major repairs in the last 5 years.
And when these vehicles do go into the shop, I don't go into cardiac arrest.
(I grew up on a Chevy-oriented farm. Switched to Fords about 10 years ago. I recently decided that I'm not going to buy another American made vehicle. Ever.)
I realize that this isn't a representative sample, but what's up with that?

8) If your organization is in trouble, and people start saying you are "too big to be allowed to fail", hasn't your size become a liability instead of an asset? Isn't the market already telling you that you're too big to pay attention to everything you're doing, and you need to trim some fat?

9) If the bailout goes through Congress and Obama signs it, does anyone want to place any wagers on how long before one of the Big 3 goes bankrupt or needs yet another bailout? I'm putting the over/under at July 1, 2011.


Fester said...

Besides the pratical arguments, you have to ask yourself about the moral arguments.

Is it really moral to tell a person who when they had the voluntary choice to support or not support a company with their money they made a choice to support company A with x amount of money. Now the government is coming in and telling those same people that they did not choose the right company or if they did they did not pay enough for their automobile and now the government is going to take more money from them under threat of jail and give it to those companies. So maybe you bought a honda, well now you also bought part of a Chevy, but didn't even get a spark plug out of the deal, or you bought a GM truck and paid $30,000 but that isn't enough so the government is going to take another $2,000 from you in taxes and give it to GM so your truck really cost you $32,000.

Anonymous said...

Uhm... American Airlines and Continental are both here in "Real America," and they needed a bailout in 2001/2002, IIRC.

Also, I assure you that despite it's being in New York, Wall Street would be blood red if the people who worked there actually lived there.

The Whited Sepulchre said...

Fester, Pete,
Good points, one and all.

What I think we're seeing is the Red States having the highest concentration of "traditional" welfare cases. The Blue states have the Big Time corporate welfare thing figured out. There are thirty some-odd states that Obama said would be in budget trouble (when he spoke at the governor's meetup a week ago).
I'm gonna be looking at the Red/Blue divide on that issue when I get a chance.

I think both of you know already that I don't vote Red or Blue, but none of the above.