Surprise, surprise… the “Big Three Bailout” ballooned from $25 Billion to $34 Billion in a matter of weeks, $18 Billion going to General Motors alone. The remainder will be split between both Ford and Chrysler.
A number of ways I feel as if automotive executives are using fear, preying on the general public’s worry about a “Greater Depression”, when comments like this are made:
“Failing to act now will hurt many American families and undermine our country’s economic recovery, far outweighing the costs related to supporting an industry that touches every district in every state of the nation,” Chrysler said.
“There isn’t a Plan B,” said GM Chief Operating Officer Fritz Henderson. “Absent support, frankly, the company just can’t fund its operations.”
“We’re on the brink with the U.S. auto manufacturing industry,” Press told The Associated Press in an interview. “If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it’s a huge blow. It could trigger a depression.”
Not only are the executives trying to pander to the emotions of you and I, they are clearly trying to make this a political issue by saying “an industry that touches every district”.
Really, how many people talk like this? Do you ever say, “God, the economy is bad. Every district in the country must be hurting.”
No, don’t think so.
Let me ask you this. Why should the American public provide a bailout when the companies cannot run their business? Ignore the potential impact to the economy, which I do believe would be significant, and strictly look at this from a business perspective.
Sales, year over year, were down 47 percent at Chrysler and a 41 percent decline at General Motors. It is true that all automakers saw a significant fall in sales, Honda, Toyota, BMW and VW all manage to turn a profit somehow. There are not begging at the alter of Congress, are they?
We will see political posturing next. Politicians will say how they don’t like the plan under consideration but that Bankruptcy of one or all three automakers is not an option. A fuss will be made but the coffers will open, giving the companies more than the revised request of $34 Billion (over the next several months) due to “harder than expected economic conditions” and, in the end, either the U.S. will witness a bankruptcy of one or two manufactures and/or the sale to a competitor based outside of America.
Update: UAW Concessions
This is this first time I’ve seen the UAW talking about giving somthing up to help the industry. It’s about time someone in the UAW brass wake up to see that without the Big 3 they are gone.
Related posts:
- Are GM and Chrysler wondering what a “controlled” bankruptcy is? I am.
- Who would have thought the Auto Industry Bailout would cost more than expected!
- GM, Chrysler and… China?
- Chrysler tells Canada “Give us money or we take our toys and go home”
- Chrysler files bankruptcy court motion to eliminate 789 of its 3,200 US dealerships