Looks like the auto industry is out for a piece of the bailout pie too. Our government really is becoming a federal soup kitchen for the corporate poor. Who knows what ailing and failing industries will crop up next looking for their fair share of the handouts. This is, of course, the government’s fault as they set a precedent with the Wall Street bailout.
Even the rhetoric used by the auto industry mirrors that used by financial institutions and Paulson, Bernanke & Co. Here’s a quote from an industry source on what would happen if Congress goes on break before money is doled out (I say before because everyone knows it’s just a matter of time):
If Congress ends its autumn lame-duck session without helping the automakers, policymakers are taking a “substantial risk with the economy,” an industry source said. The automakers and their allies warn that failure of the Big Three could cost 3 million to 5 million jobs when the impact on related industries is calculated.
Imminent doom and destruction if nothing is done…when have we heard that before? Hm.
Their claims about the impact on parts manufacturers and car dealers may be legitimate, but they’re nothing new in a capitalistic economy. Competition exists to weed out the weak, and it just so happens that Chrysler, GM, and Ford are weak right now. If they go under it’s because of natural market forces, not neglect. Isn’t it odd how capitalism is great when you’re winning but sucks when you’re losing?
They have had many opportunities to respond to imminent competitive threats from foreign auto makers and their cheap, more fuel-efficient cars. Yet they haven’t done much of anything. Ford, for instance, recently issued a sizeable press release about their new 2009 and 2010 lineups that doesn’t explicitly mention, even once, the miles-per-gallon capabilities of their cars. And besting Honda and Toyota by 6mpg is not something to brag about. They are already innovating the next leap in efficiency. Give them a year, they’ll beat you by 10 or 20.
Our car companies are failing. There’s no denying that. That’s part of our economy, though. If my industry was failing, I don’t know what tune I’d be whistling. But I hope now that if/when that occurs, someone is smart enough to advocate against wasting billions of tax payer’s dollars (that have no sound financial backing, but I digress) to revive a faction of an industry whose time has past. If Ford, Chrysler, and GM can’t compete within the reality of the global economy, they should be removed from it.
Yes, this means a potentially crushing blow to our economy now. We’re all in recession mode, though. We’ve all cut back or are in the process of doing so. Let’s take the hit now instead of drawing out the deaths of these corporate giants.
Also, if you’re in the mood for a little more “it’s our fault we’re here but we’ll blame you for inaction if you don’t save us” fear mongering, check out GM’s Fact and Fiction site. The video in the corner is laden with interesting facts and figures. My favorite part happens around 3 minutes and 32 seconds in:
We can loan $25 billion now…or lose $156 billion later. What will we do?
The key word being now. How much more will they want in 3 months? 6 months? A year? Not a bone in my body believes their issues will be solved with $25 billion. If that’s all it would take to revive our auto industry, it would already have been done. The we part is great, too. Once again, profits are theirs and losses are all of ours.
I’m still waiting for Ashton Kutcher to jump out and scream “America, you got punked!”