Opinion: U.S. Auto Bailout is Crap

The $25 billion the U.S. automakers are asking for from Congress this week comes out to about $81.97 from each of America’s 305 million people. That’s not a ton of money, but it is about two weeks worth of gas for me. So the question for today is what exactly have the U.S. automakers done to deserve my (and your) two weeks of driving money?

Chrysler, Ford and GM sent their CEOs to Washington yesterday to plead for a bailout. While they’re begging for handouts, keep in mind that they each flew in on a private jet owned by their individual companies. Even though they say that they might run out of cash within a month, GM and Chrysler are footing the bill for private jets. I’m sure Mulally could find two extra seats in Ford’s jet for his buddies. They’re asking me to give up two weeks of gas money and they can’t even bother to planepool (that’s carpooling for planes).
 Car in toilet
© 2008
The argument that a bailout saves jobs doesn’t hold up.  Any jobs saved by this bailout will be lost in two months when one of the carmakers finally goes under. I say we let the Detroit Three sink or swim. They’ll be forced to sell some of their brands, and the manufacturing jobs that go with them, to companies that might actually manage to turn a profit. When the plants used to make GM’s cars close, what do you think will replace them? Plants that make other cars! The American people aren’t going to stop needing and wanting cars. If all three American car companies close down for good and none of their cars are sold, it just means the foreign carmakers will need to build more vehicles. Those vehicles will need to be built in factories, which will be great because we’ll have a whole bunch already built.
Chrysler’s parent company Cerberus certainly doesn’t deserve to be bailed out. They bought Chrysler a year ago from Daimler and knew it was a risky investment. If the oldest carmaker in the world couldn’t turn Chrysler around in 10 years, why should we be sympathetic to a company that hasn’t even bothered to give it a try? If Walmart bought out Linens N Things tomorrow, then turned around and asked for money because their purchase was a stupid one, why would we care?
Only Ford actually has a plan for this year, and GM and Chrysler have basically given up. Everything that might be interesting or desirable from either GM or Chrysler has been pushed back or canceled altogether. GM’s big plans for survival hinge on turning off escalators and not buying any more sticky-notes, while Wagoner flies to Washington in a private Jet.
Nardelli, Chrysler’s CEO, said last night that he would accept the $1 a year that Lee Iaccoca famously took for a salary. If a bailout does happen, everyone in upper management at all three automakers should take the $1 a year salary that Nardelli has agreed to.  Anyone who doesn’t accept it obviously doesn’t take personal responsibility for the state of their company and should be replaced by someone who cares about the U.S. taxpayers’ money.

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