Between The Lines: Automotive News' "The Cost of GM's Death"
I can’t remember the last time Automotive News [sub] unleashed an email alert for an editorial. Hell, I can’t remember the first time they did it. As in this is it: the first time. You see how stunned I am? Well, no prizes for guessing which side of the bailout issue Crain’s boys fall. They unleash the argument that’s become the de facto Detroit defense: a bailout sucks, but not bailing out Motown sucks even more. They fucked-up but YOU will suffer. So YOU should pay. NOW. BEFORE IT’S TOO LATE! Hysteria and hyperbole? You don’t know the half of it. Well, not yet anyway…
“If Congress thinks a bailout of General Motors is expensive, it should consider the cost of a GM failure. Let’s be clear. The alternative to government cash for GM is not a dreamy Chapter 11 filing, a reorganization that puts dealers and the UAW in their place, ensuring future success. No, even if GM could get debtor-in-possession [DIP] financing to keep the lights on (which it can’t), Chapter 11 means a collapse of sales and a spiral into a Chapter 7 liquidation.”
Dreamy? Like “Oooh. Danny Zuko is so dreamy?” Find me anyone who argues that a GM Chapter 11 wouldn’t be a painful process for all concerned. And who says GM can’t get DIP financing? Shouldn’t we explore the possibilities of government assistance after a GM Chapter 11? Painting the bailout issue in black and white terms is the worst kind of yellow journalism, and does the automaker’s chances of long-term survival no service.
Especially when there is no plan on the table. No goals. No time lines. No strategic outline. Nothing. In that sense, “this” GM turnaround has about as much chance as the last (existing?) one, which was also bereft of publicly declared targets. As far as AN’s concerned, never mind. Pay no attention to that man behind his $15.5m curtain. It’s time to piss or get off the pot. Do or die.
“GM’s 100,000 American jobs will die. Health care for a million Americans will be lost or at risk. Hundreds of GM’s 1,300 suppliers will die. Their collapse could take down Ford Motor Co. and Chrysler LLC, perhaps even North American transplants. Dealers in every county of America will close. Frogs will fall from the sky. Boils shall fester on the skin of small children. And lo the Earth shall be cleaved in two and swallow the city on the river as the whale swallowed Jonah.”
Only the whale didn’t swallow Jonah. (And I made-up those last three sentences.) GM filing for Chapter 11 isn’t necessarily what professional courtesans call a “hard stop.” Even if GM loses half its market share, that’s still a Hell of a lot of cars and trucks. Someone will build them. Why not a post-C11 GM (i.e. Chevrolet)?
“Criticize Detroit 3 executives all you want. But the issue today is not whether GM should have closed Buick years ago, been tougher with the UAW or supported higher fuel economy standards.”
So what IS the issue? Like the automakers AN seeks to suckle, their unnamed writer just can’t seem to focus.
“The $25 billion in loans that Congress approved to partially fund improvements in fuel economy? Irrelevant. Dead automakers do not invest in technology.”
The switch in logic reflects Detroit’s inability to stay on message (hint: jobs, jobs, jobs). You bastards wanted us to build clean, fuel-efficient cars and liberate American from its oil addiction and save the God damn polar bears? Well we can’t do that if we’re DEAD, can we?
AN is also surprisingly conflicted on who’s in and who’s out on the death-defying bailout.
“Each of the Detroit 3 is in crisis. But Ford, which borrowed big two years ago and thus has more cash today, may skip a bailout and the strings attached. Cerberus, which bought Chrysler last year, doesn’t deserve money. Government cash might help sell Chrysler to a strategic owner.”
Yeah, that’s a thorny one. Does Ford really need the dough? And why stuff government money into Chrysler when its owner is Mr. Moneybags himself? Anyway, AN is looking out for you!
“The taxpayer needs protection and an upside. GM’s top management may need to go. Government-as-shareholder deserves a big voice. Those details can be worked out.”
May? You see that mangled piece of charred rotting flesh hanging off your shoulder? We may have to amputate. “Details?” We don’t need your stinking details! Just give us the money before we die all over you. After all, no matter what you i-dotters and t-crossers say…
“…the stark fact remains: Absent a bailout, GM dies, and with it much of manufacturing in America. Congress needs to do the right thing — now.”
Call me crazy, but handing $25b to the same people who got GM into this mess– without knowing exactly what we’re getting ourselves into– is not the “right thing.”
And now it’s time to send our email alert. Just as we have for the last five years.
Fallout11 on Nov 17, 2008
Bailing out any of the Detroit 3 at this point IS positive reinforcement for poor historical performance (that got them to this point). The Curly-style "We're a victim of circumstance" doesn't hold any water, even more so than it does for the homeless bum begging for your money that you pass on the way to work this morning. And you didn't bail him out with a $10000 cash infusion, did you? Why not? Because, much like GM, you know damn well he'll squander it and still be under a bridge (by choice) six months from now. Use the bailout to cover retirees and suppliers, post-bankruptcy, rather than throw it down a rathole.
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