With the proposed GM-Chrysler merger effectively off the table, automotive colmunists are slowly returning to the task of facing reality. Needless to say, they don’t like what they see. Though Mark Phelan may smell the smoke on the breeze as well as the next Detroit cheerleader, he obviously still figures a pom-pom in the hand is worth two in the bankruptcy court. Stuck with three sickly children who won’t all make it through this dark night of the industry, Phelan verbally douses Chrysler in 57 sauce and calls out the wolves. “If I were the U.S. Treasury Department, I’d offer GM executives $10 billion, on the condition that they walk away from Chrysler and never look back,” goes the first sentence of his latest opus. “Or $15 billion, $20 billion,” begins the second. His point? That a merger between GM and ChryCo would be disastrous. And though he acknowledges the real reasons for this (overlap, baby), he doesn’t stop there. “Cerberus’ ownership of Chrysler is a strip-and-flip operation,” raves Phelan, adding “Chrysler’s leaders spent much of the nine years they were part of DaimlerChrysler approving vehicles that didn’t stand a chance in the market.” Sure, there’s no use in arguing that the Sebring and Compass aren’t evidence of a company that practically wants to fail, Phelan isn’t feeding his beloved Chrysler to the wild beasties for the sheer fun of it (that’s our job). It’s all about saving Ford and GM.
You see, “[Ford and GM have] learned from the mistakes they made in the 1980s and ’90s,” argues Phelan. “The recent introduction of successful vehicles such as the Chevrolet Malibu, Cadillac CTS, Ford Fusion, Escape and Edge and GMC Acadia prove it. Cut them checks.” Of course another way of looking at it is that they haven’t learned their lessons and the introduction of vehicles like the Aveo, Uplander, Impala, G3, Flex, 500/Taurus, US Market Focus, etc prove it. But seriously, pay them not to merge with Chrysler. They deserve it. Phelan admits that Chrysler does do some things well (minivans, Ram, Jeep, comedy) and he’s correct when he says that Chrysler is worth enough for Cerberus to sell off in pieces and exit the car business sans bailout check.
But throwing Chrysler under the bus doesn’t justify a (further) massive bailout of the last two standing. And this whole discussion assumes that GM won’t be bankrupt by the time this is posted. “Doing better than Chrysler” is not the same thing as the “feasible plan for the company to survive long-term,” that Phelan would make a precondition of “his” bailout. Which it already is. Section 136 (d) (3) (A) of the Energy Independence and Security Act already states that to qualify for retooling loans, automakers must prove their project “is financially viable without the receipt of additional Federal funding associated with the proposed project.” In other words, Ford and GM already need a bailout just to qualify for the bailout. So please Mark, set down the pom-poms and walk away. Or, the next time you offer to spend $10 to $20b on a horrid investment, make sure it’s all yours.