Michael Moore, in floating a suggestion that the feds purchase the Big Three automakers, beat them into shape and resell them, raises an interesting question. Excerpt:
You could buy all the common shares of stock in General Motors for less than $3 billion. Why should we give GM $18 billion or $25 billion or anything? Take the money and buy the company! (You're going to demand collateral anyway if you give them the "loan," and because we know they will default on that loan, you're going to own the company in the end as it is. So why wait? Just buy them out now.)
Whether or not it makes sense to nationalize the Big Three, Moore has a point. Ford's worth twice as much as GM, and Chrysler's not publicly traded, but it's in terrible shape too. Why should the taxpayer give the Big Three far more money than the market thinks their companies are worth, to allow the same management structure that has failed so miserably over all these years to keep on keepin' on? I don't understand how that works. I don't want the government running car companies, but if we've decided that the Big Three are going to survive no matter what, at least the taxpayer ought to own what he's paying for anyway. What sense does it make to give these idiot executives a big fat check, given their track record?
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Did you hear the crap they laid out today before congress?
Apparently, they made a few mistakes - and are here to fix them - but it was ultimately factors out of the control of Mgmt that has lead to the current crisis in the Auto industry.
That idea alone is enough for me to refuse them a bailout. Forget the corporate Jets or the $1 salaries. I want to see them on their knees, taking FULL responsibility for their own position, after thirty years of mismanaged assets and screwing the pooch, before I would even consider giving these incompetent management teams a single cent.
Failure to accept responsibility shows me that they have learned no lessons. Where's the hat in hand? All I hear from them now is bail us out or we'll fire 3 million people. And a case like that merit's one response - a deaf ear.
It irks me too that instead of flying commercial, they wasted more time and effort (money) by driving from Detroit to DC. That's completely out of touch and they deserve to go under.
Don;t get me wrong - I'm from an Auto town, have worked for years in the auto industry (recycling), and I stand behind the unions and skilled labor that is keeping this industry together but giving these guys a loan is like trusting a crackhead with your life-savings.
Where's the R&D on these vaporous Hybrid and electric technologies? They are years off, and will cost way more than what 34 bil in operating capital can generate. These guys have big problems that can't be solved by chapter 7, 11 or any amt of collateralized debt. The entire management teams need to be shown the door - and where are you going to find qualified and motivated people in the labor force who will work for nothing?
Detroit needs some radically fresh ideas. I say merge the companies into two (or combine departments and divide them into 4-5 smaller focused entities), lose 40% of the mgmt staff and bring in someone who can mobilize the troops - oh, and force the unions to do what they were meant to do in the first place; namely motivate and provide for labour - japan can help with this one. There's no reason you need to be complaining about making $75 an hour with the best guaranteed benefits of any industry - where I'm from that type of compensation is a privilege, not a right. If you don't like it - McDonalds is always hiring.
Did anyone see the CBS news story last night about the Big Three's lobbying efforts? This is a must-read!
http://www.cbsnews.com/stories/2008/12/03/cbsnews_investigates/main4646424.shtml
Excerpt:
"But nobody's been a bigger advocate for Motor City interests than Dingell. And for him, the stakes aren't just political, they're personal.
"'There's an actual conflict,' said Ryan Alexander of the nonprofit group Taxpayers for Common Sense. 'His personal financial health, you know, the wealth of his family is tied up in the car industry.'
"Dingell's wife Debbie once worked as a lobbyist for GM.
"When she married the congressman, she became a senior GM executive at an undisclosed salary. And we found the couple has extensive GM assets.
"Dingell's current financial disclosure filed in May lists GM stock worth up to $350,000, options worth up to $1 million more, and a GM pension fund. In 2000, among the Dingells' GM assets were stock options worth up to $5 million.
"And in 1998, the congressman reported selling GM stock options worth up to $1 million dollars.
"Dingell wouldn't agree to an interview."
"ZOMG you agreed with Michael Moore! He is a fat commie and eats babies!"
No no no.
He eats LOTS of babies.
"He eats LOTS of babies."
And I bet he order's a diet soda too.
i love eating babies
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