Bailout Watch 143: Dallas Morning News Ed: "Enough is Enough"

Robert Farago
by Robert Farago
bailout watch 143 dallas morning news ed enough is enough
“Yes, the auto industry is big. And important. But Congress shouldn’t dole out more taxpayer dollars to save firms that missed opportunities to help themselves.” And so begins The Dallas Morning News‘ editorial advising its readers that Motown should be left to its own devices. The News is home to one of automotive journalism’s genuine gems: writer Terry Box. Box has always been loyal to his readers’ best interests; this editorial has his fingerprints all over it. Be that as it may, Motown may wish to point out that Texas is home to Toyota’s massive– and now underutilized– Tundra factory. Of course, it’s also the state where you’ll find GM’s Arlington plant, once-proud maker of the GMC Yukon, GMC Yukon XL, Chevrolet Suburban, Chevrolet Tahoe and Cadillac Escalade. No matter how you slice it, The Lone Star state has at least one dog in this fight. Make the jump for the rest of the ed [thanks to peakwarehouse for the link].

“Rick Wagoner, GM’s audacious chief executive, wants the federal government to invest $3 billion in a merged GM-Chrysler, take over about $3 billion in pension obligations and buy another $4 billion in commercial paper to keep the newly combined automaker flush with cash. And he wants the money to come out of the $700 billion that Congress recently approved to rescue financial institutions.

Gee, Rick, why not ask the Treasury to pick up the lunch tab, too?

The demise of these companies would come at a terrible time for their workers and the economy as a whole. By some estimates, more than 2 million jobs would disappear, and the federal government would inherit massive pension obligations if the automakers landed in bankruptcy court.

But both automakers have known for years that this day of reckoning was coming yet steadfastly resisted the long-term manufacturing and cost-cutting decisions that would have made them leaner and more competitive with foreign automakers. They repeatedly opposed attempts to improve fuel-efficiency standards and placed the lure of short-term profits from oversized gas guzzlers ahead of their long-term health.

To add insult to self-inflicted injury, the industry’s latest request for federal welfare comes barely a month after the government agreed to loan them $25 billion to retool factories for fuel-efficient cars.

A bailout would not solve the automakers’ problems. Standard & Poor’s Ratings Service predicts that the companies would still be on life support. Both are bloated and aren’t making cars that Americans want to buy. Although onerous, bankruptcy would finally force the automakers to address the market and financial realities.

A government commitment to prop up the automakers would squander good taxpayer dollars on a bad deal. Enough is enough.”

Join the conversation
2 of 7 comments
  • Bloodnok Bloodnok on Nov 03, 2008

    given i wouldn't part with my hard-earned to acquire a d3 product, why should i part with my taxes to support those products? it's totally unlikely that $25b + $10b + $?b will ever result in the d3 making anything i'd buy so why am i expected to piss away this money? time for another tax revolt, methinks. i've been trying to find a soapbox app that would allow me to send this message to my congress critters ...

  • No_slushbox No_slushbox on Nov 03, 2008
    SexCpotatoes: I was oversimplifying things a bit - the equity is that of both Cerberus and other large investors from the island of Manhattan – Cerberus is kind of like a very high fee mutual fund for institutional investors. My point was that this GM-Chrysler merger is just another Wall Street bailout. It is not about jobs in the heartland and it will not save jobs in the heartland. In the Chapter 7 the pension obligations will fall on this agency: , basically the pension version of FDIC. Like the FDIC it is self-supporting and does not rely on taxpayer money. Chrysler is an LLC, and would likely be sold to GM under that structure, which means that the owner, whether Cerberus or GM, will have no personal liability for any Chrysler obligations unless special circumstances cause the court to pierce the veil ( ). I don't particularly think that Cerberus should be held personally liable, unless they did something like "Siphoning of [s]corporate[/s] LLC funds by the dominant [s]shareholder[/s] member", but if Chrysler is insolvent or becomes insolvent then Cerberus should lose every cent that they and their backers invested.
  • Bd2 Other way around.Giorgetto Giugiaro penned the Pony Coupe during the early 1970s and later used its wedge shape as the basis for the M1 and then the DMC-12.The 3G Supra was just one of many Japanese coupes to adopt the wedge shape (actually was one of the later ones).The Mitsubishi Starion, Nissan 300ZX, etc.
  • Tassos I also want one of the idiots who support the ban to explain to me how it will work.Suppose sometime (2035 or later) you cannot buy a new ICE vehicle in the UK.Q1: Will this lead to a ICE fleet resembling that of CUBA, with 100 year old '56 Chevys eventually? (in that case, just calculate the horrible extra pollution due to keeping 100 year old cars on the road)Q2: Will people be able to buy PARTS for their old cars FOREVER?Q3: Will people be allowed to jump across the Channel and buy a nice ICE in France, Germany (who makes the best cars anyway), or any place else that still sells them, and then use it in the UK?
  • Tassos Bans are ridiculous and undemocratic and smell of Middle Ages and the Inquisition. Even 2035 is hardly any better than 2030.The ALMIGHTY CONSUMER should decide, not... CARB, preferably WITHOUT the Government messing with the playing field.And if the usual clueless idiots read this and offer the tired "But Government subsidizes the oil industry too", will they EVER learn that those MINISCULE (compared to the TRILLIONS of $ size of this industry) subsidies were designed to help the SMALL Oil producers defend themselves against the "Big Oil" multinationals. Ask ANY major Oil co CEO and he will gladly tell you that you can take those tiny subsidies and shove them.
  • 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)
  • AMcA Phoenix. Awful. The roads are huge and wide, with dedicated lanes for turning, always. Requires no attention to what you're doing. The roads are idiot proofed, so all the idiots drive - they have no choice, because everything is so spread out.