Car Manufacturers Con

Automakers Return With A Plan

copyright © 2008 Betsy L. Angert.  BeThink.org

Weeks ago House Representatives refused to award the auto industry a blanket bailout or even a bridge loan.  Policymakers insisted they must see a reasonable plan to revamp a business near bankruptcy.  The legislators set a deadline for delivery of the proposal, December 2, 2008.  This same date was reserved for another auto review; in Florida a delayed vote on emission regulations would finally be realized.  The two tales may seem separate; certainly, the cities where Congresspersons will meet are far apart.  Nonetheless, the sagas are inexorably connected.

As automobile manufacturers submit plans that advocate an eagerness to adjust to a new reality, at the same time they lobby the automobile sector, as they know it.

Consumers, taxpayers, may have already been critical of the industry; yet the question is, will fear of widespread job loss cause common citizens and Congress not to inquire as they might.  Is an anxious America too anxious to ask; have we not seen this house of cards, or cars, once before.  Did the car corporations not deal from the bottom of the deck in the past and might they again do us in?  The American people need only consider the dichotomy of two news stories.  On December 2, 2008, Big Three automakers try again for a bailout, and (Florida) State panel ponders stiff rules on car emissions. 

In Washington, this Tuesday, with hat in hands the automobile manufacturers submitted their plan to Congress.  The plea was as a cry of "mea culpa." In Florida, the Big Three forge ahead with a contradictory strategy.  They endeavor to delay a green development.

The car corporations Chief Executives prepare to sit on the Hill.  The perhaps duplicitous tycoons hope  to beseech lawmakers in the next few days.  Please forgive us they may whimper.  As requested, we have spent weeks away from the world of Washington.  The Big Three might tear as they proclaim the error of their ways and ask for forgiveness.  Corporate tycoons have been humbled.  Automakers state they will change their ways.  If the trio can obtain a bridge loan, they promise to be good, penny wise, and not pound foolish, if only given a second chance.

Admittedly, the triad say, our first attempt to explain the dilemma was a lemon.  They understand the reason the House of Representatives asked General Motors Corporation, Ford Motor Company, and Chrysler to provide lawmakers with detailed plans on how they might use federal money to ensure their long-term survival.  For General Motors, Rick Wagoner, Ford Chief Executive Alan Mulally, and Chrysler's Robert Nardelli resigned themselves to the reality, twenty-five billion would not be forthcoming if the dole was used only to avoid an immediate collapse.  Today, December 2, 2008, the three declared would be a new dawn.  

The automobile moguls have abandoned the use of private jets.  The significance of what had became a symbol of corporate greed was not lost on the entrepreneurs who now pledge to be frugal.

For the return trip to Washington, Ford Chief Executive Alan Mulally will drive to the scheduled Thursday hearing in a in a gas-electric hybrid vehicle.  General Motors and Chrysler Corporations released reports that their CEOs would not fly in personal planes.  The implication is business class was just fine.  Word is the auto-industry Senior Administrators agreed to a substantial pay cut.  The public is told two of the executives would work for a salary of one dollar a year.  A paltry one hundred pennies would suffice.  Sources do not mention the millions that these three might have spent, saved, and stashed away for years.  Likely, they have plenty of money, individually to survive.

Instead, talk is of strategies to sell off lines that do not do well or are no longer viable sources of income.  General Motors has arranged to put it Hummer division on the market.  Granted, that was done six long months ago.  Now, the car company considers the sale of Saab, or even Pontiac, and perhaps Saturn.

Ford's management was able to secure a buyer for Jaguar and Land Rover.  Indian carmaker Tata Motors purchased the products earlier.  Alan Mulally, on Monday, mentioned he would acquire funds from the sale of another luxury line, Volvo.  The magnate also stated Ford Motor Company could survive if the recession were not as long and deep as some fear.  Deflation or Depression could wipe his company out, as could the connection to a failed General Motors or Chrysler.

What was not offered of on the federal Hill was that which occurred concurrently in the flatlands of Florida.  On the same day that the automakers expressed their woe, and willingness to be different, to the Congressional leaders in Washington, they attempted to thwart progress in The Everglades State.  As the manufacturers plead their case earlier in the District of Columbia, in Florida, the industry tycoons stood firm in their decision to maintain the status quo.  

The nation's most important industry is putting its best effort into lobbying Washington and Tallahassee instead of designing and building cars and light trucks that help reduce greenhouse gas emissions and avoid the worst effects of climate change.

The Big Three showed reckless disdain for the idea of new designs and the development of vehicles that used renewable energy.  Despite the concerns expressed by Florida Governor Charlie Crist and the State Department of Environmental Protection (DEP), the automakers have actively worked against the adoption of clean car standards in the South East.

Thirteen [13] other States have thankfully assumed the same stricter California standards.  It is increasingly obvious that the people prefer to reduce greenhouse gas emissions from tail pipes.  Yet, lobbyists for the car manufacturers knowingly choose to defy the desires of the public.  The Big Three do as they have done for decades.  As they attest to their guilt, they work to undermine actual progress.

General Motors, Ford, and Chrysler turn to the federal government whenever they can.  In Florida, the trio requests, the people be patient.  The automobile-makers avow the citizens "should wait a few weeks longer." Industry leaders decisively declare Washington will impose stringent standards soon.  Again the words not uttered by the Big Three are the ones most worthy.

The federal standards the car companies are still waiting for, known as CAFE, have yet to be enacted by the National Highway Transportation Safety Administration (NHTSA).  Instead, the headlines have all been about the car companies being rebuffed in Washington as they've sought taxpayer funds to cover years of bad business decisions . . .

The Consumer Federation of America (CFA) conducted a study of the proposed rules affect in Florida and found that consumers who purchase vehicles that are compliant with the standard spend less on gasoline on a monthly basis than the increase in their monthly auto loan payment.  This direct, short-term consumer pocketbook test alone justifies ERC ratification of the standard.

The CFA report also found that the clean car standard serves the long-term consumer interest because reduced gasoline consumption reduces the vulnerability of the economy to price shocks, enhances national security and improves public health and the environment


Perchance the automobile moguls are not as dishonest they appear to be.  They may be but blinded by a desire to recover from losses too deep to imagine.  Reports also released today, December 2, 2008, reveal November, sales fell drastically.  General Motors sold 41 percent fewer vehicles although they began a year-end clearance sale several weeks early.  The former industry leader sees the writing on the walls.  

The triumphant vehicle producer Toyota also suffered a 33.9 percent fall from grace.  The Japanese company that had long claimed glorious sales offered phenomenal incentives to purchase their wares.  Yet, still they were virtually crippled by an economic crisis.  Honda's sales also declined, 31.6 percent.  Ford Motor Company fared only slightly better.  The corporation with "a better idea" lost 30.6 percent in sales.  Even the esteemed BMW [Bavarian Motor Works] said its sales dwindled.  The numbers were a startling 26.8 percent below what they has been in previous months.

While there is abundant reason to worry, and fear for the future, if Americans lose sight of what the Big Three truly do, consumers will again be duped as we were decades ago.  No cry or intent to change, can cast a new course.  Citizens and Congress could choose to invite a crucial conversation.  The people and policymakers might explain; had General Motors, Ford, and Chrysler come to the Chambers and said, we have decided to work with Florida lawmakers and secure stricter standards, perchance lawmakers and laymen would believe the trio intended to retool.  

Were the car companies to state and relate  a need to impose stiff regulations on the industry that had served them well, Americans might trust the sincerity of those who now beg for a financial advance.  Had the Big Three done more than ask for more dough, and sell-off the securities that tie them down, then, maybe the American consumer, taxpayers, could believe as the Chief Executives claim, there is a need to be benevolent.  Such assurances have not materialized.  Obstinate actions have.

It is said, the Almightily helps those who help themselves.  Perhaps, the public and policymakers might do the same.

Sources of sorrow, sales, and auto industry realities . . .

  • Auto Industry Rescue Could Exceed Initial Requests, Executive Proposals Push Funding Past $25 Billion.  By Kendra Marr and William Branigin.  
Washington Post.
Tuesday, December 2, 2008; 5:02 PM
  • State commission to vote on new auto emissions standards. Associated Press.  The Gainesville Sun. December 2, 2008
  • Last round of pleas from the Big 3. Marketplace. December 2, 2008
  • Big Three automakers try again for a bailout, By Jim Puzzanghera and Ken Bensinger.  The Los Angeles Times. December 2, 2008
  • pdfFloridians to Automakers: Stop Opposing Clean Car Rules.Audubon of Florida. November 21, 2008
  • pdfFloridians to Automakers: Stop Opposing Clean Car Rules.Audubon of Florida. November 21, 2008
  • pdfFlorida's Stake in the Fuel Economy Battle. Consumer Federation of America,. July 2007
  • State panel ponders stiff rules on car emissions. Associated Press. December 2, 2008
  • Ford Says It Can Survive but Urges a Rescue for the Industry, By Nick Bunkley.  The New York Times. December 3, 2008
  • November Was Another Dismal Month for Auto Sales, By Nick Bunkley.  The New York Times. December 2, 2008

  • Tags: Alan Mulally, auto industry, bailout, Big Three, Bridge Loan, Business, Car Emissions, Chrysler Corporation, Congress, Economy, Emission Regulations, Energy, Florida, Ford, General Motors, Honda, Hummer, Rick Wagoner, Robert Nardelli, Saab, Saturn, Toyota, Volvo (all tags)

    Comments

    6 Comments

    Change is a challenge.

    . . .   or a choice.

    by BL Angert 2008-12-02 07:09PM | 0 recs
    Re: Car Manufacturers Con

    Their plans include the elimination of 25-30% of their workers.

    Don't give them a dime unless they INCREASE American jobs.

    The bailout money will only go to line the pockets of the fat cats and they will declare bankruptcy next year anyway -- After they've absconded with our money.

    Dirty, rotten bastards.

    by wblynch 2008-12-02 07:31PM | 0 recs
    Re: Car Manufacturers Con

    Better than 100%

    all at one time, too!

    by LordMike 2008-12-03 08:48AM | 0 recs
    Re: Car Manufacturers Con

    Here's an interesting idea: Nationalize GM

    by LakersFan 2008-12-02 09:28PM | 0 recs
    Also, do not trust the One Dollar salary

    You will see execs promise to take only a dollar. What they will probably do is give themselves generous stock options which will get vested real fast. What they need to do is factor in the market price of said options when they declare their compensation.

    by Pravin 2008-12-02 11:45PM | 0 recs
    The Auto Industry...

    ...looks to me like TWA and American near the end of their respective runs.  As a St. Louisan, I shook my head when the local CoDel manufactured the purchase of TWA by American.  It was also a constant cycle of union givebacks.  The same thing is currently happening with Detroit.

    The CoDel was so married to the concept of those companies servicing Lambert International that when American went under, it left the airport a ghost town.  So we shouldn't necessarily be married to THOSE 3 automakers necessarily but we should make sure that there is SOME American auto production in the rust belt that is union friendly.

    by AZphilosopher 2008-12-03 12:50AM | 0 recs

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