Bailout Watch 29: WSJ Votes Nay. Then Aye. Then Nay.

Cammy Corrigan
by Cammy Corrigan
bailout watch 29 wsj votes nay then aye then nay

Paul Ingrassia, former Detroit Bureau Chief for The Wall Street Journal (and current biz guy for same) is not happy with “the Detroit situation.” Ingrassia warns that backing Freddie Mac and Fannie Mae deal with public funds encouraged management to make “reckless investments that have backfired badly.” He then scolds Detroit in a decidedly TTACian way. “The Detroit Three got into their current quandary by making decades of bad decisions, with some help from the United Auto Workers union,” with a special shout-out to lavish management bonuses and the UAW’s jobs bank. Ingrassia believes a company should only be bailed out if “its demise would wreak havoc on the entire economy.” Detroit doesn’t pass the smells bad test. “Even if Ford, GM and Chrysler were to go out of business — and it’s highly unlikely that all three will simply cease to exist — there will be plenty of good cars for Americans to buy. And many will be made in America, even if they carry foreign nameplates. Toyota, Nissan, Honda, Hyundai and other foreign car companies have expanded greatly their U.S. manufacturing operations in recent years. They’re doing so because Americans are buying their cars.” OK, so it’s no means no, yes? No. “All this said, if Detroit’s short-sightedness and political expediency make a bailout inevitable, let’s make sure taxpayers stand to get rewarded for their risk.” Illogically enough, offerring the re-tooling loans to ALL automakers is Ingrassia’s biggest string. “But if developing fuel-efficient and alternative-energy cars is deemed worthy of taxpayer subsidies for public-policy purposes, it’s just common sense not to put all our eggs in Detroit’s basket.” Bailouts for all? Go figure.

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2 of 8 comments
  • Boybarian Boybarian on Sep 09, 2008

    I don't think, as you suggest, that Mr. Ingrassia was seriously advocating for a bailout. I think he was being sarcastic. Anyway, you guys called it first. The regular press is just a bit behind the curve.

  • ZoomZoom ZoomZoom on Sep 09, 2008

    Cammy, I think you have just coined a new phrase! The "TTACian way" should be defined (for novices and newbies), and should be present at the top of the Wiki page.

  • Dusterdude The suppliers can ask for concessions, but I wouldn’t hold my breath . With the UAW they are ultimately bound to negotiate with them. However, with suppliers , they could always find another supplier ( which in some cases would be difficult, but not impossible)
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