Ask The Best And Brightest: Does The Auto Bailout Still Matter?
Today is election day, the time when good Americans process all the negative advertising they’ve seen over the previous months and decide on the lesser of several evils. But the best thing about election day isn’t the sense of civic pride or even the knowledge that you’ll be able to avoid political ads for at least a few months afterwords. The greatest thing about elections is that, for one moment, the nation gets a snapshot of itself, a picture of what really matters to us as citizens. So this seems as good a time as any to ask you, TTAC’s Best And Brightest, how you feel about the potency of the Auto Bailout as an issue. After all, the bailout is currently caught in limbo; impossible to undo, at yet still far from resolution, good or bad. If anything, the latest indicators show that the GM bailout was fairly compromised, in the sense that the new company will be worth about what the taxpayers put into it (in the $50b range).
But does it matter at all how much taxpayers get out of GM’s (and eventually Chrysler’s) IPO? And if so, is it important that GM repay the taxpayers completely, or do the bailed-out firms need only to be sustainable for a certain period to make the bailout a success? As I see it, the question isn’t so much one of politics. After all, the rescue is hardly the definitive political issue for any citizen not directly affected by it (a relatively small group compared to the American electorate). The real issue seems to be whether political opposition to the bailout will affect sales at GM and Chrysler, and whether achieving certain financial or taxpayer payback goals will eliminate any such political impacts on sales. Do the bailouts affect your relationship with GM and Chrysler, and if so, what do you need to see in order to leave the bailout in the past?
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The GM bailout caused me to vote FOR Harry Wilson, the Team Auto guy who re-organized GM's finances and canned GM CFO Ray Young, who didn't know his job. Wilson ran for NY State comptroller but unfortunately lost in a very close race to the less-qualified Democratic incumbent. I'm fine with the bailouts. At the time they happened, it needed to be done. Bitch and moan all you want about free-market, deserved-to-fail hardcore capitalism. What's your answer when it will destroy 1 in 12 American jobs? And it's not all about the UAW, you union-haters. That includes small to mid-sized businesses that are this country's backbone. Chrysler will rise and fall with Fiat, and I'm OK with that. As for GM, either Team Auto didn't go far enough with radical reform, or they still can't manage themselves. Why am I convinced this IPO will be a premature disaster? After Wall Street, Carlyle Group, Akers and the rest get theirs, I'm worried that we're looking at American Leyland within 3-5 years.
Wow, Danii2, the use of that particular imagery shows where your priorities lie. I don't claim that the actions of Team Auto saved all those jobs. But isn't is just remotely possible that the reverberations of a GM Chap. 7 plus Chrysler shutdown could have been that dire? Or would "the market" have taken care of that?