Editorial: Bailout Watch 499: Barack Obama, Sergio Marchionne and the GM Pensioners

Robert Farago
by Robert Farago
editorial bailout watch 499 barack obama sergio marchionne and the gm pensioners
As TTAC approaches its 500th Bailout Watch, the autoblogosphere is abuzz with bailout-related news. But first, a word from a TTAC reader experiencing schadenfreude by proxy. “Robert, I think you are going to need some counseling if GM doesn’t crash and burn. Your little columns are getting more breathless by the week. Best to make some therapy appointments in advance, cause it aint going to happen. Keep up whatever it is, I enjoy glancing at it.” [Jeff, is he saying my therapy sessions ain’t gonna happen?] [Robert, yes, he is.] So, as I remind my electronic correspondent to remember to turn off the lights on the way out, here’s what’s going down in the Motown district of Bailout Nation . . .Obama plays the class card – President Obama has addressed the pressing political problem we can loosely term “why the NSFW are giving these Detroit guys a second chance?” The Detroit News reports:Obama on Tuesday defended his decision to give the two automakers more time to resolve their problems, despite harsh criticism from Republicans who said the companies had made no progress.“We owed that not to the executives whose bad bets contributed to the weakening of their companies, but to the hundreds of thousands of workers whose livelihoods hang in the balance. Entire towns, entire communities, entire states are profoundly impacted by what happens in the auto industry,” Obama said.Obama’s Fervent Hopes for Change – I suddenly “get” the beauty of Obama’s “Hope and Change” ethos: you can hope for change, but if it doesn’t happen, you avoid the blame. Here’s what I really, really hoped for. But hey, NSFW happens. Don’t blame me. I did the vision thing. AND I did my best to make it happen. They screwed it up. Bad them! Bad bad bad them! (What was my therapist’s number again?)“It is our fervent hope that in the coming weeks, Chrysler will find a viable business partner and that GM will develop a business plan that will put it on a path to profitability without endless support from the American taxpayer.”Fiat CEO: No Union Concessions, No Deal – As TTAC commentator PCH101 has pointed out at least 1,245 times, the United Auto Workers’ (UAW) and Canadian Auto Workers’ (CAW) contracts with American automakers are not the be-all end-all of their profitability, or lack thereof. In fact, in this case, the UAW’s genetic recalcitrance may be a convenient excuse for Fiat to extricate itself from the do-or-die (for Auburn Hills) Chrysler—sorry, what do you call it? Merger? Marriage? Co-dependency?Anyway, The Globe and Mail scores the scoop that Fiat CEO Sergio Marchionne’s ardor for ChryCo isn’t quite so fervent anymore, with less than two weeks to the feds latest hard stop on life-sustaining Chrysler “loans.”“Absolutely we are prepared to walk. There is no doubt in my mind,” Sergio said. “We cannot commit to this organization unless we see light at the end of the tunnel . . . The minute you talk to me about historical entitlement in an organization that is technically bankrupt, it’s a nonsensical discussion. There is no wealth to be distributed.”Fiat CEO: True Story. It’s All About Me – I didn’t bother reporting on rumors that Fiat’s CEO was looking to take over the top slot at the ailing American automaker from Bob “You Want Me to Leave? You Gotta Pay Me” Nardelli. I mean, why would anyone expect the Presidential Task Force on Autos to install an Italian CEO at the head of an American automaker looking to for a double-dip of US taxpayer billions? My bad.Short of injecting funds into Chrysler, Mr. Marchionne said Fiat will do whatever it takes to revive Chrysler, including offering himself up as CEO. “Fundamentally, that’s possible, but the title isn’t important,” he said. “What’s important is that they hear me. It’s possible that I will have to divide my time between running Fiat and running Chrysler.”GM Retirees Wake-Up to C11 Pension Disaster – Although the federal Pension Benefit Guaranty Corp. (PBGC) has previously warned both GM and Chrysler employees that the companies looted their pension funds (to the point where a C11 would wipe out the majority of their money), The Detroit News serves-up this timely reminder:“The fact is that people are going to see some reductions that obviously they hadn’t planned for,” PBGC acting director Vince Snowbarger said. “They have had a promise made to them that is not being kept and all we can do is try to step in and help out a little bit.”Define little? When GM terminates its pension plan, the PBGC says it would assume $4 billion of the $20 billion promised. At Chrysler, the PBGC would assume $2 billion of the $9.3 billion shortfall.Looks like I’m not the only one who’s going to need some therapy (what’s the bet the feds fund the UAWs?). Oh, wait. This isn’t going to happen. Carry on then.
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  • Wsn Wsn on Apr 17, 2009
    agenthex : April 16th, 2009 at 7:24 pm Hyundai is organized and planned properly for its position on the value curve. Consistent with this, it’s constantly improving its quality and raise prices somewhat. If you had noticed, Hyundai swallowed up Kia which was the failed example of low price/quality (as was daewoo). ----------------------------------------------- Let's look at the keywords "improving", "organized", and "planned". They are either cause or symptoms of better productivity. So you do agree with me.

  • Wsn Wsn on Apr 17, 2009
    agenthex : April 16th, 2009 at 7:24 pm Again ironically for you, they have a union. ----------------------------------------- What's the irony? I never said union is the problem. I said productivity is the problem. In the case of GM, the productivity problem is largely related to the union. With Hyundai, their union didn't hurt productivity badly, yet, to show an effect. Case in point, their worker are paid substantially less than GM UAW workers. Knowing Malibu is at the same price/quality point as the Sonata, getting GM workers paid the same as Hyundai workers should be part of the solution.

  • Jdt65724922 How can a Chrysler E-Class ride better than a Chrysler Fifth Avenue?
  • Lorenzo This series is epic, but I now fear you'll never get to the gigantic Falcon/Dart/Nova comparison.
  • Chris P Bacon Ford and GM have decided that if you can't beat 'em, join 'em. Odds are Chrysler/Cerberus/FCA/Stellantis is next to join in. If any of the companies like Electrify America had been even close to Tesla in reliability, we wouldn't be here.
  • Inside Looking Out China will decide which EV charging protocol will become world wide standard.
  • Chris P Bacon I see no reference to Sweden or South Carolina. I hate to assume, but is this thing built in China? I can't help but wonder if EVs would be more affordable to the masses if they weren't all stuffed full of horsepower most drivers will never use. How much could the price be reduced if it had, say, 200hp. Combined with the instant torque of an EV, that really is plenty of power for the daily commuter, which is what this vehicle really is.