Planes, Trains and Automobiles
The Everyman is angry, and who’s to blame him? The government has already bailed out investment banks, commercial banks, retail banks, insurance companies and now they’re considering throwing another $34 billion into a potential black hole known as the US auto industry. Where will it end? Truth be told, nobody knows for sure. I’ve said it before and I’ll say it again, this is a historic period and we haven’t seen one like it since 1929. But historic periods require historic measures and we won’t know if we’ve done the right thing until years into the future. What’s most important is that we don’t repeat the mistakes we’ve made in the past and turn what’s already a painful economic slowdown into a catastrophe.
Do the car makers deserve the government’s support? Probably not. Will America lose 2 million jobs if the government steps aside and lets the chips fall where they may? Probably not. Will the Everyman stop buying US cars from a company that’s allowed to go bankrupt? Probably not. So why not let it all happen? Just say no and let the market sort out the winners from the losers. After all, that’s what capitalism is all about. Survival of the fittest and all that, right? Unfortunately, not this time. This time it’s the Everyman’s economic health that’s on the line. Can the Everyman afford to bet the ranch on a roll of the dice? Can the Everyman take the chance with an economy that’s teetering on the brink of collapse? Absolutley not! So what do we do?
First, we’ve got to give the bums a lifeline. We need to bridge the gap between NOW and BANKRUPTCY and avoid the worst case scenario. But it has to be a bridge loan only, and only for the company or companies that must have the bridge to survive the next 90 days, but not $34 billion. In return, all 3 companies PLUS the UAW MUST agree to sit down at a table with a SWAT team of financial, political and corporate representatives and sign on to a major restructuring of the US auto industry. It could include mergers, selling or closing business lines, organized bankruptcy, you name it. But don’t let them out until a real plan is on the table that will change the nature of the industry. The plan would then be approved by Congress and any additional money that might be necessary could be considered at that time. Only then will the Everyman be assured that the future will not be more of the same. It sounds simple and maybe even naive, but unless the Everyman gets some real changes, the future for American cars is bleak.