The CEOs of the Big Three auto makers, which are destined to soon be the big two or the big one or the small three, have been on Capitol Hill for two days begging for money so they can save the jobs of the UAW. The UAW sent along a nearly literate representative to assist the CEOs in their panhandling. How did the CEOs get to DC? Well, let’s just say they didn’t fly coach:
The CEOs of the big three automakers flew to the nation’s capital yesterday in private luxurious jets to make their case to Washington that the auto industry is running out of cash and needs $25 billion in taxpayer money to avoid bankruptcy.
The CEOs of GM, Ford and Chrysler may have told Congress that they will likely go out of business without a bailout yet that has not stopped them from traveling in style, not even First Class is good enough.
All three CEOs – Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler – exercised their perks Tuesday by flying in corporate jets to DC. Wagoner flew in GM’s $36 million luxury aircraft to tell members of Congress that the company is burning through cash, asking for $10-12 billion for GM alone.
“We want to continue the vital role we’ve played for Americans for the past 100 years, but we can’t do it alone,” Wagoner told the Senate
And apparently they can’t do it on a budget either. I listened to most of this testimony (at least until it started to piss me off) and I have less sympathy for them now than before. They did not make the case for tapping the public purse. They spent two days whining about how the global financial crisis is the cause of their problems when nothing could be further from the truth. Their cost structure is too high and they make lousy cars. What is so hard to understand about that? How do you fix it? Cut costs and make better cars. If they get bailed out, what are the chances they will do that considering that Ford still maintains 8 corporate jets?
The Detroit Three are not worthy of being bailed out anymore than the Wall Street banks. Failure has to be part of the capitalist equation and short circuiting that process just prolongs the agony. If we send billions to Detroit that is billions that won’t be available for some other more worthy entrepeneur. And we’ll be hurting the companies that are performing well, like Honda. Honda manufactures cars in the US and is not asking for a handout. Why should workers at Honda, Toyota, BMW and all the other companies who manufacture cars here pay to prop up their competitors?
Honda just opened a new factory in Greensburg, IA and was swamped with applications:
When Honda announced it was hiring 900 employees, 33,000 people applied. Honda eventually plans to employ about 2,000 at the plant, which started production in October.
There is nothing wrong with letting the “Big Three” go into bankruptcy. Maybe, given time to restructure, they could actually produce a product that will allow them to compete with the Hondas of the world. Handing them taxpayer cash and allowing them to keep the corporate jet will not get the job done.
If you oppose corporate welfare Mike Shedlock has produced a letter you can fax to your Congress critter. Here’s the link.