Now it would seem, like AIG, the US will take stakes in the Big Three, effectively buying into the companies and restricting their use of the money and ultimately limiting their ability to be competitive in a rapidly changing auto marketplace.  More enjoyable still is that many think a “car czar” will be required to “oversee” the Big Three and their use of the money.  Kenneth Feinberg’s name is being thrown around for this position, but besides being a lawyer and having some experience with the 9/11 victim’s compensation fund it doesn’t seem to me that he knows his head from a hole in the ground when it comes to cars.  What makes peope think that just because someone works for the government or is appointed to a role that they can accomplish that role without training, experience, and inside knowledge that would allow them to determine good from bad?

Sure, from the outside, with our 20-20 vision for what has happened in the past, it’s easy to see that all of the Big Three have made mistakes and bad decisions.  They’ve been wasteful, possibly short-sighted, and maybe even a little top-heavy (sounds like our government at times, doesn’t it?), but I believe that it’s going to take those same people to at least point us in the direction of what is to come.  Anything less than that and you’ve got someone guessing at what makes sense and what doesn’t.  GM management seems to know this, and I suspect that Chrysler and Ford have a good inkling, too.

“To blame the American automobile executives for this frankly is ridiculous,” GM Vice Chairman Mr. Lutz said, suggesting an unforseen downturn in the economy and housing market are the culprits. “How were we supposed to forecast this when the government doesn’t forecast it and the financial institutions couldn’t?”

On the good side (said with sarcasm), though, considering there are so many things for them to worry about, everyone seems to be in agreement that all auto-manufacturers should get rid of their private planes.  They media has focused on this, while forgetting how painful flying commercial for a senior management team can be.  Heck, I bet they write in the agreement that they even have to fly commercial and forfeit their frequent flier miles, too.

Ranter

The problem that I have with the proposed auto-bailout is that it’s starting to look like the prejudices are coming out.  Most vocal are the same people that supported the recent $700 billion bailout.  These rich folks in office want to protect the companies and individuals that have backed them the most and aren’t worrying as much about the average American.  Most government officials have forgotten who votes in this country, and unfortunately when it comes time to vote again most will have long forgotten about the decisions made today.  Think about it – until recently most of the country has never heard of a company named AIG.  Yet, the government had us all convinced that if they went under hundreds of thousands would be impacted.  To this point already, AIG has been “loaned” over $150 billion and it’s still questionable if they’ll survive.  That billion with a “b” and taxpayer money.

On the other hand, I think you would be hard pressed to find a person in the United States over the age of six who hasn’t heard of General Motors.  Most over 10 probably know how successful they used to be and their impact on America.  Right now their industry needs a lousy $25 billion and they’re getting denial every step of the way.  Senator Christoper Dodd, (D) from connecticut, who also happens to be the Chairman of the Senate Banking, Housing, and Urban Affairs Committee is quoted as saying:

“Their board rooms in my view have been devoid of vision. They have promoted and often driven the demand of inefficient, gas guzzling vehicles, and dismissed the threat of global warming.”

Anyone want to bet on whether the boardrooms of AIG and the banks benefiting from the bailout were any more visionary in their foresight on the mortgage crisis impacting the world today?  Sure seems like that would have been easier for everyone to see that coming then it would be to imagine those same companies bringing the economy to its knees leaving consumers unabe to afford to buy cars from GM, Ford and Chrysler.  Befitting his title, Senator Dodd goes onto justify the reason that banks need help by saying:

“I appreciate the Treasury Department’s willingness to adjust to the current situation in our financial markets.  I am also gratified that they listened to Congress when we insisted on including alternative strategies, such as liquidity injections, in the financial rescue legislation.  It is alarming to imagine how limited the Treasury’s options would be if Congress had not made substantial changes to their three page proposal.”

…, it is becoming increasingly apparent that a robust and aggressive program to stem the tide of foreclosures sweeping across the nation is critical to any policy to put our economy back on track.  I am concerned that we may have to wait until the next Administration before we have the real change in economic policy that our nation needs, but it is my sincere hope that Secretary Paulson collaborates with Chairman Bair to get this program up and running as soon as possible.  There is no legitimate reason why they would be unable to do so.  Secretary Paulson should be as quick to realize that the foreclosure issue is critical to solving our problems as he was in realizing that equity purchases were necessary.”

Any questions about where Dodd’s allegiances are?  I guess there’s not a ton of car money in Connecticut.  Unfortunately, at this point for the government it is probably all or nothing.  The government either needs to look at these companies and say they cannot be replaced or continue heading down the path of rescuing those that are most in need.  Obviously this isn’t trickle-down to even the smallest companies, but I think that GM, Ford and Chrysler would have to qualify and it’s amazing to me that the same government that rubber-stamped $700 billion can’t see it.

Ranter