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Onus is on Congress to treat U.S. automakers fairly
Onus is on Congress to treat U.S. automakers fairly
Two weeks ago, Congress chastised the CEOs of the three U.S. auto companies for coming to Washington in their private jets to ask for government loans to see them through today’s lean times. No doubt, the heads of General Motors Corp., Ford Motor Co. and Chrysler LLC could have been more sensitive to appearances in arranging their transportation and should have come with more details about how they intended to use the money and the changes they would make.
But that was then, and this is now. Today, the automakers will submit their proposals; the Senate will hold hearings Wednesday and the House on Friday.
Assuming that the companies submit proposals that respond to concerns raised by lawmakers last month, the onus is now on Congress to explain why it won’t provide the lifeline that U.S. automakers need.
Changing dynamics
Some things have changed since GM’s Rick Wagoner, Chrysler’s Bob Nardelli and Ford’s Alan Mulally were given the bum’s rush by congressmen eager to portray themselves as stalwart guardians of taxpayer dollars.
For one thing, Ron Gettelfinger, head of the United Autoworkers, has retracted his ill-advised comment that the UAW would make no further concessions. Concessions may be necessary all the way around, not only to convince Congress to provide a bailout, but to, in fact, save the Big Three automakers.
For another, it is increasingly clear that some of the most vocal opponents of a bailout of U.S. automakers are acting out of provincial political motives. We commented earlier on U.S. Sen. Richard Shelby’s disdainful attack on Detroit, noting that Shelby’s home state of Alabama is home to Honda, Nissan, Mercedes and Hyundai plants. The latest senator to announce he won’t support help for U.S. automakers is Sen. Lindsey O. Graham, R-S.C., who said, “I don’t believe it is a good idea to take $25 billion and give it to the three major car companies, which I think have a business plan that’s doomed to fail.” His state is home to a BMW plant.
Graham is one of those who blithely suggests that the automakers declare bankruptcy. But the bottom line remains that bankruptcy for any of Detroit’s Big Three would have disastrous consequences that would extend far beyond the hundreds of thousands of workers and their families who would be directly affected. The Pension Benefit Guarantee Corp. would be forced to assume pension obligations. The health care industry that would be saddled with more uninsured sick people. Auto dealerships and other creditors would lose billions of dollars owed to them by the car companies. Shareholders would lose their investments.
Double standard
Congress might be able to ignore all those reasons why it should provide the auto industry the help it seeks. But it cannot ignore the fact that in the two weeks since some of its members treated Wagoner, Nardelli and Mulally with something close to contempt, it has sat idly by while the administration has doled out hundreds of billions of dollars in additional bailout money to financial institutions. It was done without asking for justification or commitments by workers or managers that they will make concessions, or even detailed recovery plans.
While automakers are putting together a plan that will pass congressional muster, some bankers are using government money to buy other banks, and are giving officers of the banks they are buying out multimillion dollar golden parachutes.
If U.S. automakers go the extra mile to answer questions raised by Congress, they should get their aid. Or, to be fair, Congress should shut off the spigot to troubled financial institutions and not reopen it until every bank or mortgage house bailout gets the same scrutiny given the automakers.
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Comments
9-1-1, school districts, police & fire - The call of the Vindy is always to 'consolidate.' Consolidate the auto industry.
In the meantime:
* America has only been spending half of what we used to spend on long-range investments (as a percentage of GDP), while China spends twice what we do.
* Travel on America’s roads increased 41 percent since 1990 while miles of road only increased 4 percent, leading to more congestion, wasted time and gas, increased injury and death and an annual loss of $230 billion.
* Europeans can zip from Paris to Frankfurt in four hours on high-speed rail, relieving much road congestion, while American freight trains suffer multi-day delays at a notorious choke point in Chicago.
* Our creaky electrical grid uses century-old technology over 50-year old power lines, when we could have a energy-efficient, reliable "smart grid" that connects rural wind farms and coastal solar power to urban centers, and allows consumers to sell back power to the grid.
* The United States government helped create the Internet, but now we rank 15th of 30 developed countries in overall broadband penetration.
* Six times as many women with children are in the workforce today compared to 1950, but day-care facilities are understaffed and lack strong educational requirements.
* Deficiencies in one-third of our school facilities interfere with the ability to teach.
* In the last two decades, more than a dozen steam pipes have exploded in New York City.
* More than 1 out of 10 American bridges are "structurally deficient."
* More than 150 levees are at high risk of failing due to poor maintenance.
Infrastructure will be theeeee "buzzword" of 2009.
Meanwhile
61 per cent of Americans oppose bailing out the Big 3, and REALLY oppose bailing out the thugs in the UAW.
There should not have been a 'bail out' of the financial sector either, and most Americans opposed that as well. Doing something stupid just to be consistent is doubly stupid.
You want to help? Fine.
Get the Federal Government *ENTIRELY* out of this. Get it out of meddling in business and in other matters outside its limited and strictly enumerated Constitutional functions. Which does NOT include regulation of automobile types or performance, or for that matter the layout of parking lots, types of lightbulbs, or capacity of flush toilet tanks. Nor does it include forcing banks and mortgage companies to grant mortgages to illegal aliens or other persons who are poor credit risks, as the CRA did and still does.
Seizing by force or threat of force the income of waitresses and farmers in order to prop up some of America's worst run corporations is just throwing good money after bad, like treating a broken leg by overdoses of pain killer.
No one has yet shown me anything that is improved by Federal meddling. This is no different.
Tell the Big 3 to file chapter 11 and void their contract with the UAW. There is no good way out of this, but there are some that are less bad than others. This is the least bad route.
By the way, ref a previous comment, there has been more than enough money stolen from American citizens to finance those few elements of 'infrastructure' that truly are the legitimate province of government at any level. Mostly, that money has been frittered away or doled out to the public employee unions that suck up far too much money already. Blame the hogs of AFSCME and their co-thieves.