The latest to put out the begging bowl are the "Big Three" auto makers from Detroit. This is not the newest of stories, since they were just there a couple of weeks ago. What is new is that they are now asking for much more money than before.
The heads of struggling auto giants General Motors, Ford, and Chrysler reappeared on the Hill yesterday to make their case anew. This time, they came more prepared. The most ambitious business plan proposed was by General Motors, the world's largest auto company, currently teetering on the verge of collapse. It set out a plan to recapture revenue through deep cuts—including slashing 20 percent of its jobs, shutting nine factories, and trying to reduce pay through talks with the United Automobile Workers union.Talk about chutzpah.No doubt the Democrats and their buddies across the aisle are more than willing to add them to the $8.5 trillion dollar plan, after all what's a few measly billion when we're already in the trillions, right? Well, the time has come to just say no.
Along with a more structured plan, however, the Big 3 also had an even bigger request: $34 billion in loans, compared with the $25 billion they'd asked for two weeks ago.
It might sound cruel and the repercussions may be grave, but the precedent a bailout would set would be vastly worse. Despite Nancy Pelosi's cries that bankruptcy is not an option, the facts speak louder than her political grandstanding. This country cannot afford to continue bailing out companies in distress, unless we wish to end up like Zimbabwe or the Weimar Republic. Allowing the Big 3 to file bankruptcy is the only solution sane people can accept. It worked for the airlines, it will certainly work for Detroit. Continuing to throw money at things will not make the situation better, (as we have seen with the banks and their "lending crisis").
The American auto industry has been, and will continue to be hampered by government, not aided. Any funds that come from the Congress will be attended by more stringent regulations, defacto nationalisation and an acceptance of fraudulent environmental rules that will insure the continued failure to compete. There is no aid to be found in Washington. At least bankruptcy will allow them to be rid of the onerous UAW contracts weighting them down and will allow them the time to restructure in a rational manner. If one of them cannot find its way back to solvency, then so be it. That's the harsh reality of a free market.
Ford could make their way back in time. They already offer a host of vehicles in their overseas markets which are soundly embraced by countries that always have gasoline over $5 a gallon. For some reason they have refused to embrace the same strategies for their US customers, as they do for their European and Asian bases. How many Americans would buy a car that got more than 65 MPG? I bet it would be a rather high number. Ford makes just such a vehicle, the Ford Fiesta Econetic, rated as a winning "green car". Too bad that the US government, and their global warming fascists, make it so hard to sell a clean diesel in this country that Ford can't or won't, sell it here. Even with artificially inflated diesel prices the car would save a driver loads of money in the long run. And, unlike hybrids, it's not a scam where cleanliness is concerned. Making vehicles like this is what would turn the tables for Detroit, not the bogus plans they are presenting to the Beltway Boys. No matter what plans they put forth, it will be too little.
It's time for the Washington crew to start saying no. Yes, the impact on Detroit and other auto states will be considerable. Indiana has something like 60,000 auto industry related jobs that would no doubt be affected. It would be a serious blow to the state government, which is already facing an unemployment insurance insolvency and the taxpayers, who would undoubtedly be called upon to foot the inevitable tax increases, but saying yes to any further bailouts would be much worse in the long run. We have to stop adding to the debt. Especially with the states now lining up for their slice of the bailout pie. It has to stop somewhere, let it begin here.
Bailout, Detroit, Politics, Libertarian, Debt, Automakers