The only thing more depressing than a man with a cup begging outside a bus station was the sight of the big three auto executives groveling before a congressional committee and seeking a bailout of the auto industry.
GM wants $10 to $12 billion, Ford $7 to $8 billion and Chrysler $7 billion. This is on top of the earlier $25 billion congress earmarked for auto industry loans.
Opinions are like noses, everybody gets one. The nose is the easy part. It already protrudes from the front of your face when you come screaming and kicking out of the womb and grows as it pleases. Opinions on the other hand take an effort to finalize. Conflicting information and data complicate the formation process. So it is with the prospective bailout.
First, we are told the alternative is too horrible to contemplate. Michael Gerson, op-ed columnist, writing in The Washington Post this morning quotes economists' estimates “that a rapid auto industry meltdown could cost up to 3 million jobs – perhaps sending the jobless rate as high as 9.5 percent.”
Even worse is the “bottomless psychology of panic” that would ensue.
Like every coin there is another side to this story. The big three developed, promoted and sold cars and trucks so big they lost sight of the world trend. Americans who bought them because of the dual macho mentality “bigger is better” and “we’re Americans” got caught up in their own hubris and lost interest fast when the vehicles didn’t hold up, gas prices soared, the economy soured and their own incomes took a hit.
I was part of that group at one time. I was going to be the first on my block to get the Lincoln Navigator. I was as excited as a ten-year old at the prospect of a new bicycle at Christmas. When they were delivered I went to the showroom and gradually came to my senses.
But even when I got “too soon smart” I did so only in part. I drive a Lincoln Towncar, like many Americans over 65 to whom the car was heavily marketed in recent years. Known as the OCM (Official Car of the Mafia) the Towncar will soon be used exclusively as a limousine to take rock stars and divas to Vegas openings and championship fights.
Meanwhile every auto maker based outside the fifty states makes cars smaller, more fuel efficient and less troublesome. And they make them cheaper with non-union labor - but don’t blame only the American unions for Detroit’s troubles. It took two sides to negotiate and approve those now expensive labor contracts. The executives also took the big salaries, stock bonuses and other comps and never looked back. Shareholders took the dividends and profits when the sold appreciated stock.
Now these same executives say they have gotten some of that old time religion and are on track to compete with foreign based auto makers…it is, they claim, only the turmoil in the broader economy that threatens them, according to The Wall Street Journal.
Bailout, yes or no? How would you vote? Send your response to arch@archibald99.com.
