Bailout Watch 168: Obama Considers Hiring A (Not The) Car Czar

by Robert Farago

Published: November 11th, 2008

bailout watch 168 obama considers hiring a not the car czar

Let’s get one thing straight: Bob Lutz is the Car Czar. The GM Veep’s claim on the title is as absolute as his inability to revamp GM’s product lineup to avoid bankruptcy. TTAC’s respect for Maximum Bob is such that we created the Bob Lutz Award, given to the automotive executive who’s made the most outrageous, politically incorrect or just plain dumb public pronouncements of the year. OK, that piece of business done, Politico reports that president-elect Barack Obama is considering appointing a car czar to oversee the U.S. government’s widely anticipated “investment” in Detroit’s failed automakers. “Specifics about the proposal remain unclear. But the transition team says Obama suggested to President Bush on Monday that aid to the auto industry could be coupled with the appointment of ‘someone in charge of the auto issue who would have the authority’ to push for reforms. The details came from a more extended readout of the White House meeting provided Tuesday. The person would assist in efforts to create an ‘economically viable auto industry,’ a transition aide said – a move that could alleviate concerns about protecting taxpayer interests if more money is directed to assist automakers.” Combine this with Nancy Pelosi and Harry Reid’s call for an equity stake in exchange for bailout billions and you have a perfect recipe for The Mother of All Automotive Failures. [thanks to KixStart for the link]

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4 of 23 comments

Akatsuki on Nov 12, 2008

I would specifically like someone not from inside the US car industry. I think they are all toxic and inbred to the point where they can't fix anything. Regardless of what you think about the bailout, this will probably happen as the economy can't soak up a hit in its industrial sector in the shape it is. This is not the tech bust of 2001, this is staving off a depression.

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Geeber on Nov 12, 2008
Michigan1: Please note that since the inception of the Republic, Michigan has always paid more into the Federal treasury than it has ever gotten out. To get the wealth transfer, you'd have to include social security payments. Since warm southern states and rural states have a higher proportion of elderly, they receive more social security payments. Matt51: I agree with a bailout, if the auto industry goes, it ain’t comin back. More likely, the Japanese transplants will pull out to move to low wage countries like China, so they can compete against future imports from China. Not all of the Big Three will go under. And please note that Toyota, Honda, Nissan and Hyundai will still build cars here. If anything, their presence in the U.S. will only increase in the coming years. The Japanese automakers don't think like their American counterparts. (This, everyone should note, is why they aren't in deep doo-doo right now.) They don't let short-term thinking rule their outlook. They aren't in the American market for the short term. They want to build cars where they sell them, and right now, even with the recession, they still sell lots of vehicles in North America. What GM needs is a thorough restructuring - either an outright Chapter 11 filing, or a quasi-Chapter 11 filing under government protection. Rewrite the labor contracts, can Pontiac, Saturn, GMC, Buick and HUMMER, get rid of those dealer networks, and start closing the factories to bring production in line with a roughly 15 percent market share. Matt51: Total Japanese employment in US is small compared to total jobs lost. The key is to have a bailout which works. The only way ANY plan will work is if GM shuts down sufficient divisions and factories - which, in turn, will put the dealers selling those vehicles out of business - until it is sized for about 15 percent of the market. Any effort to "preserve jobs" is a waste of taxpayer money, as those jobs are already redundant. Not enough people want what they are making to ensure a profit (which, please note, is the reason for a corporation's existence - to make money for shareholders by making products that people want to buy at a price that makes a profit). GM is already too big for its real market share (the one not artificially puffed up by incentives and sales to rental car companies); it will have to SHRINK if it wants to be a sustainable concern for the long term. And that shrinkage means lots of UAW and management jobs are going to be lost. A government bailout just delays the inevitable while wasting lots of taxpayer money, mainly because the Democrats aren't going to tell the UAW that a fair chunk of members who work for GM should be updating their resumes...

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Ra_pro on Nov 12, 2008

Bertell, You are looking at mostly irrelevant historical details of the Czarist past. Czar is an absolute ruler over his domain. He is apolitical (above politics), somebody with enormous power who gets things done; done the way he sees fit. The proper figure to emulate here is Peter The Great or Catherine The Great. The history of czars in the US has been quite the opposite of their title. They have been political and impotent mostly.

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1996MEdition on Nov 12, 2008
Cool! Car Czar! They have a job application form at Pres elect Obama’s web site. Lets all go over there and apply to be the Car Czar! Does the job come with a cool hat of some kind, maybe some young, chubby interns? Probable list: Ralph Nader Jay Leno Al Gore Give it to Wagoner & Lutz. They would be totally ineffective (which is something I desire in government bureaucracy) and it would get them out of GM finally.

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