For the past few days I have been waffling on the subject of whether our government should bail out the big three auto makers. On the one hand, this is a capitalist country and the way capitalism works is if you can’t compete, you lose. Period.
On the other hand, our economy is in the tank and the failure of our auto industry would send ripples through all sorts of directly and tangentially related businesses. As they said about AIG a few weeks ago, the Big 3 may be too big to fail.
I’m waffling no more and you know what tipped the scales for me? The CEO’s of Chrysler, GM and Ford, testified before Congress this week in an attempt to get a bailout loan. Guess how these guys got from Detroit to Washington D.C.? Using their private jets. Not even just one private jet. Three private jets at an estimated cost of $20,000 each. The arrogance on display here is beyond measure. These guys don’t get it and Congress did not turn a blind eye to it either. Representative Gary Ackerman put it nicely:
“There’s a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands,” Rep. Gary L. Ackerman (D-N.Y.) advised the pampered executives at a hearing yesterday. “It’s almost like seeing a guy show up at the soup kitchen in high-hat and tuxedo. . . . I mean, couldn’t you all have downgraded to first class or jet-pooled or something to get here?”
So you know what I say to these arrogant, in-the-pocket-of-the-oil-company fat cats? File chapter 11 like every other business that can’t compete. You’ve had your head up your hind quarters for decades, resisting every suggestion to modernize the fleet and make your cars both competitive and future oriented (i.e. more electricity, less gasoline).
Now there are those who ask whether this hard line attitude is worth the damage that could be done. I have heard only one credible objection to the auto makers going bankrupt and that is that no one will buy a car if they can’t be sure the maker will be around to warranty the car down the line. So, I suggest that the government play a limited role here. How about a government subsidized warranty program for the auto makers until they get back on their feet? This way the money is specifically targeted towards helping the auto makers maintain sales while they retool their organizations.
Bottom line: the CEO’s joyride to Washington is proof positive that they are unfit to lead this industry into the future. Their companies need to go bankrupt, re-organize with a new business plan and clean up shop. One of the on air pundits suggested putting Steve Jobs in charge of the retooling. It’s a damn good idea. As my wife says, give Steve Jobs a year and we’d have the i-Car. It would sell like hotcakes and would address the environmental and economic concerns that the auto industry has ignored for the past 30 years.