Michigan Republican Rep Hot For GM – Chrysler Merger
Yahoo! Finance reports that Michigan Representative Thaddeus McCotter has joined State Senator Carl Levin in suggesting that the GM – Chrysler merger is something that really ought to happen, even if the feds have to, uh, help. A Republican suggesting government intervention to broker a deal (i.e. kick-in your tax money) between two large corporations? Sure! “I would be supportive of anything as long as it guarantees people the opportunity to vote for me keep their jobs so they can vote for me so I can keep mine.” In fact, Tad’s “biggest concern” is “if there’s not a merger.” “If there is no merger you could see the entire Chrysler car company destroyed, disbanded and thousands of Americans put out of work.” Which is also true if there is a merger, but as they say, a week is a long time in politics. Anyway, check out the video interview on the page; Tad’s got a terrific little wiggle as he explains the difference between being a capitalist and a “free market supporter.” [thanks to Steven Lang for the link]
If the merger happens, Chrysler will still cease to exist. The merger --> bailout --> C11 theory is the only one that doesn't smack of hallucinogens, and if that theory proves true, all of Chrysler's employees and dealers will be on the chopping block. It's not a matter of saving jobs. It's a matter of who pays for Wagoner and Nardelli's life of leisure and cushy retirement package.
It's a double edged sword folks... If these companies go down in flames you'll have millions without jobs and tens of billions in unfunded liabilities... which will be picked up by the Fed's (and eventually our grandkids) whether we like it or not. If Chrysler merges with GM, who knows. As an industry, I would think it could represent a mind numbingly stupid move unless the new Goliath has the opportunity to undue the strings of legal issues and fiefdom interests that effectively keep it gagged. A break-up of both automakers would be a far more intelligent scenario. But then again, it also depends on how the surgery goes. I believe that by doing this, getting rid of the legal issues, and emasculating the fiefdoms within the castle walls (especially upper management), would do wonders for the Big 3. But that would take the richest and most powerful folks in this country... and they collectively have too much interest in having things go the other way at this point.
Steven Lang: "It’s a double edged sword folks…" Or as my Dad would say, "They are between a rock and a hard place." In this case, "they" are the politicians. Do they (a) offend voters by "heartlessly" refusing to aid major employers, or do they (b) waste billions of taxpayer money on non-viable private businesses. It's not surprising that politicians would decide to be "compassionate" by choosing option (b). When you stop to think about it, that's the fundamental problem with democracy--that people will unwisely use government to give themselves goodies. And it's why we have entitlement train wrecks not far ahead.