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The GOP through the voice of Senate Minority Leader Mitch McConnell does not provide a convincing argument that Republican leadership supports bankruptcy for the auto industry rather than a taxpayer funded bailout. Simply arguing over the details of a bailout does not protect the American taxpayer. If the auto industry is unable or unwilling to formulate a radical approach to solve the industry’s problems no amount of taxpayer money will succeed in solving the problem.

As for others who may be affected by an auto industry failure what is different about that then all the past failures of other businesses. Are businesses that tied themselves to the auto industry incapable of transitioning to a different industry? Are workers displaced by failure in the auto industry incapable of doing what others do when they lose a job? Isn’t labeling a business as too big to fail just rhetoric for believing you have enough political influence to have someone else pay for your mistakes?

When animals dominated the American landscape of transportation in the ‘horse and buggy’ days what happened to all the people and jobs involved in that arrangement when the internal combustion engine and mechanically powered vehicles arrived on the scene? Did the government bail someone out then? Or did people adjust to changing times and develop their own solutions?

A more recent McConnell response on video is only currently available in Windows Media at republican.senate.gov won’t be linked here as this blog will not promote MS products. But the text version is here. (click)

Stanford Matthews
MoreWhat.com

Another classic situation of two competing arguments vying for taxpayer money.  Those who claim the sky is falling and not bailing out the auto industry will offer chaos to the American economy and the other argument which says ‘not so fast’.  The typical ploy of describing impending doom as a method to gain support for a dumb idea is once again at the heart of the discussion in Washington DC.

Rather than spending more taxpayer dollars and then trying to get them back if the auto industry continues to fail, forcing them into bankruptcy, take bankruptcy now. The auto industry would certainly not be the first business to accept such a fate.  And if successfully emerging from Chapter 11 at some point in the future they would not be the first to do that either.

Enough with the frenzied approach to use taxpayer dollars to bail out everyone who has failed.  Stop the insanity now.  Let those who are failing or those who have failed use standard measures to fix their problems rather than making those problems ours.

Good for you, Senate Republicans opposing the auto industry bailout.

Stanford Matthews
MoreWhat.com

Senate Republicans Vow to Block Aid to US Automakers

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Congressional Democrats say they have reached agreement with the White House on a deal to give U.S. automakers billions of dollars in loans and require the companies to restructure to stay competitive in the global marketplace.  Although the deal has wide support in the House of Representatives, but its fate remains unclear in the Senate, where Republicans say the measure does not go far enough to force the industry to reform.

The proposal would make $14 billion in loans immediately available to General Motors, Chrysler, and Ford to help shore up the beleaguered automakers through March. The loans would come from already-appropriated money.

In return, by the end of March the companies would have to submit a restructuring plan to achieve long-term viability and international competitiveness.

Some Senate Republicans were quick to express their opposition to the plan. They argue that giving automakers money first and then demanding that they restructure is the wrong approach.

Senator Richard Shelby of Alabama is among several Republicans who are vowing to block the bill from advancing in the Senate.

“Unless Chrysler, Ford and General Motors become lean and innovative and competitive in the marketplace, this is only delaying their funeral,” he said.

But Democratic Senator Debbie Stabenow of Michigan, the state where the automakers are based, warns that if one or more of the companies go bankrupt, millions of jobs would be lost - further harming a U.S. economy, which is already in recession.

“This is more than just penalizing a company that you are mad at. This is about the underpinnings of our economy, and fundamentally whether we are going to compete with every other country and make things in an advanced, manufacturing economy,” said Stabenov.

At the White House, Deputy Chief of Staff Joel Kaplan says President Bush would be in touch with individual Republican lawmakers to win their support for the plan.

“We wanted to make sure that it was tough and that this was not a bridge financing to nowhere, that we could look these members in the eye, and we could look the American people in the eye and say that this measure gives these companies a chance and their stakeholders a chance, but its not a lifeline to continue with bad management and a bad business plan,” said Kaplan.
The plan also calls for the president to appoint a so-called “car czar”, someone to oversee the loans and monitor the companies’ progress toward reforming.

Congress and the American automobile industry’s CEOs from GM, Ford and Chrysler continue their kabuki dance in Washington. In public view it would appear that politics and business as usual are responsible for avoiding a sensible approach. From concerns about an initial bailout of 25 or more billion taxpayer dollars being offered as an early Christmas present for automakers the latest figure in the press seems to be 15 billion with oversight. Is that the Congressional effort to make the whole thing more palatable to the general public? Lowball the front end offering and when things quiet down hand them more money when no one is looking? Why are the carmakers not being required to use the typical restructuring plan of bankruptcy available to all troubled businesses?

Senator Bob Corker (R-TN) stopped just short of advocating bankruptcy for the automakers. His plan concludes with the following statement. “These are the same types of conditions a bankruptcy judge might require to ensure that these companies become viable and sustainable into the future, and if they will agree to these terms then we have something to talk about. The process I have suggested would allow them to avoid the problems and stigma that accompany a formal bankruptcy, while forcing them to do the things they need to do to be successful companies.”

The ‘problems and stigma’ Senator Corker states pale in comparison to the refusal of automakers to accept the fact they have done little to remain competitive over the last few decades. Bankruptcy is exactly the course that should be taken. It requires the same entities who were involved in this failure, the automakers and their creditors, to arrange for salvaging the situation they all contributed to without involving the American taxpayer. The same could be said for other bailouts on the public dime but it is probably too late for that but no reason for allowing the insanity to continue.

Progress made in bailout plan for Big 3 automakers
By JULIE HIRSCHFELD DAVIS – 6 hours ago

WASHINGTON (AP) — Congressional negotiators continue hammering out legislation that would dole out billions to automakers — but promises to yank back the money if a government-run board and overseer decided the companies weren’t taking steps to overhaul themselves.

The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. The size of the package hasn’t been finalized, but it is expected to be about $15 billion, several congressional aides said.

The unnamed Congressional negotiators and aides as well as the attempt to convince the public their money will be carefully utilized to save the auto industry provide little comfort based on Washington’s track record for decision making to date. It would not be a surprise if the politicians and business ‘leaders’ in this particular scenario employ the time tested tradition of dragging this out until the average citizen loses interest and they have no fear of public outrage to do what they planned from the beginning. Let the public pay for the fiasco. Perhaps that is why they always express concern for the ‘middle class’ as that is the group who shoulders the burden of paying for politics as usual.

Not that the general public shares no responsibility for the current economic problems and the bailout frenzy active in the nation’s capitol but they are not in as strong a position as those who control government and corporate America when it comes to influencing the outcome of public affairs. If the current problems and their implications for the future strength of the American economy are not sufficient to cause the public to change that fact it is likely nothing ever will.

(A Monday report from Reuters suggests a deal may be completed today. Wonderful, just wonderful

Stanford Matthews
MoreWhat.com

The lame excuses provided by the head of the UAW for bailing out the US auto industry proves once again organized labor has no shame and even less credibility which demonstrates its waning role in American life for decades. Most people may have held this view since it became difficult to distinguish organized labor from organized crime. From noble beginnings as a champion of the plight of ordinary workers to holding the country hostage with nationwide strikes and a string of financial scandals featuring pension funds and mob bosses, unions have rendered themselves just another corrupt special interest group clinging to self-serving agendas.

With one Democrat quoted in the article below supporting the most recent in a long string of bailouts and the history of ‘labor’ support for liberal politicians, specifically Dems, it is clear the socialist tendencies are alive and well on the left. The one Republican quoted expresses the practical viewpoint that the auto industry should seek the protection of Chapter 11 as is customary in such matters to restructure debt in an effort to turn the industry around rather than receive a government handout.

It would be better to hear the auto industry either emerged from Chapter 11 in a stronger position or has failed and been sold off to competitors than more news of the taxpayer being stuck with another Washington ripoff.

Stanford Matthews
MoreWhat.com

U.S. Auto Union Chief Pleads for Government Aid

Democratic leaders are demanding blueprints from Chrysler LLC, Ford Motor Co. and General Motors Corp. before they will schedule votes on any new federal aid.

The head of the United Auto Workers union made a public plea Sunday for government help for U.S. carmakers as the Big Three put the final touches on stabilization plans to submit to Congress.

“We cannot afford to see these companies fail,” said Ron Gettelfinger, the UAW chief, calling on Congress to approve the aid during a special session the week of Dec. 8.

Gettelfinger said a $25 billion rescue plan for the carmakers is “not a bailout, this is a loan — a bridge loan — that will get us through until we can take a longer-term look at exactly what needs to be done in the industry.”

Democratic leaders are demanding blueprints from Chrysler LLC, Ford Motor Co. and General Motors Corp. before they will schedule votes on any new federal aid. The plans, due Tuesday, are to be scrutinized at a Senate hearing Wednesday and a House hearing on Friday.

If lawmakers like what they see, Congress may reconvene the following week to consider the auto bailout.

Is there anything good to come of the current and so-called global economic crisis? Below is another report suggesting there might be. Although situations like the current international turmoil invite participants and observers to discard any uncomfortable or distasteful epiphany that results during times like these it is incumbent on the rest of us to keep them alive.

The epiphany suggested above is the revelations surfacing that the rest of the world is to one degree or another dependent on the bad old USA for their economic survival. Certainly the reverse is also true and in a perfect world everyone would cooperate with everyone else. But how often is America criticized by nearly everyone else on the planet? Why is it so often suggested that all the bad in world emanates from the US? This whole global mess dominating the conversation of late may in fact shed some light on how the world really works and what the US component contributes.

Sabre rattling and war mongering are not the least of the complaints expressed and directed toward the US. No one seemed to mind when the US led forces to expel Saddam Hussein’s Iraqi Army from Kuwait. There was a coalition of forces but we all know who carried the largest burden in human and financial risk. No one on the right side of WWII seemed to mind the US supporting Britain in the early years or landing at Normandy or liberating France or anything else right up to the surrender of Germany and Japan. Oh ya, there was the little matter of a couple of bombs and two cities in Japan. That may be criticized now but you can be certain few were raising objections as the war ended.

And how about after WWII, who spent immense quantities of money rebuilding what the war destroyed? After the spirit of cooperation between Russia and the US faded at the end of WWII, who stood as the only nation ready, willing and able to confront the only other true superpower? To this day, all the criticism about the US and military and national security measures employed avoids the very real likelihood that American strength and intervention is quite probably the reason the planet still spins and we are all here to complain about this year’s set of problems and who is responsible for them.

There is little discussion attending to the obvious fact that the reason this crisis is global is due to the fact that all the other countries experiencing financial difficulties participated in how we got here just as much as the US. A fine example in the last few months was China scaling back on purchasing US debt especially that which was or is backed by real estate assets. Can anyone say subprime? Everyone hopped on the gravy train.

German Chancellor Angela Merkel is again referenced in the report below as she was in the one here yesterday from the same source, VOA. You can add BASF, a VP from the EU and others to the list. Oh no, on the one hand recipients of orders from US companies as well as international business partnerships will suffer if the US auto industry cannot be turned around and on the other hand propping them up is viewed with disdain as unfair competition. These days on this planet the US simply cannot win. No can please all the people all the time but a little honesty from those who benefit from American resources would be appreciated. If for no other reason than it would be a truthful evaluation.

Sure, the United States makes mistakes and Americans do not always do the right thing. Show me a country and people who do. But for all the good the US has done for others in the rest of the world a little balance between compliment and complaint would make the statements more credible. But then around the world just like in the US all politics is local and much of what is said may be intended for a select audience which resides elsewhere, namely the sources own constituency.

Stanford Matthews
MoreWhat.com

Guenter Verheugen, EU VP of Enterprise and Industry

Sluggish sales and disappearing profits for the U.S. auto industry are being blamed for growing problems around the world.

The world’s largest chemical company, BASF, says Wednesday it is suspending production at 80 plants, affecting about 20,000 workers.

BASF officials say the company is preparing for “tough times” after the auto industry canceled orders on short notice. The German-based chemical giant makes a variety of products used in automobiles, including chemicals used in exterior paint, emissions control devices known as catalytic converters and plastics used in engine components.

BASF also says orders from the construction and textile industries have decreased dramatically.

Meanwhile, the European Union’s Industry commissioner is blaming the troubles of European automakers on the ailing U.S. auto industry.

Guenter Verheugen says the EU should take “extraordinary measures” to prevent German carmaker Opel from collapsing. Verheugen warns if Opel - a division of U.S.-based General Motors - fails, it would hurt the entire European auto industry.

Also Wednesday, Japan’s largest carmaker said it would shutter production at its U.S. and Canadian plants for two extra days in December. Toyota also said it would lay off about 250 temporary workers.

German Chancellor Angela Merkel said Tuesday European officials would closely monitor the type of help the U.S. offers its auto industry, saying she did not want European companies to be at a competitive disadvantage.

Verheugen says any aid to European automakers would be targeted, and not part of a larger, industry-wide bailout.

We are all “bank holding companies” now   (Michelle Malkin)

The report below suggests use of the word ‘global’ when referring to current economic troubles around the world not only describes the geographic nature of the problem but geopolitical as well. German Chancellor Angela Merkel’s concern of money going to US automakers from US taxpayers putting German automakers at risk provides a substantially humorous face on this reverse order of trade subsidy worries. How many foreign countries place barriers to US goods all the while accepting US corporate outsourcing to spur growth in their own economies?

The early promise of ‘a new direction’ in France with the election of Nicolas Sarkozy may be giving way to the honeymoon is long over and the French are scurrying back to their old ways of sending up flares of impending doom and expecting external concessions. This blog’s suggestion that the best thing about Sarkozy leading France was the opportunity for more photo ops of Carla Bruni may end up being less comedy relief and more political reality.

Russia seems to be the only country in this report which relies greatly on the other part of the auto industry equation, energy. The recent dive in the price of oil from its July record highs leaves the nation with the split personality between cold war demon and new world democracy with a severe reversal of fortune in petro dollars.

The only thing missing from all this international intercourse is the predictable hope for world peace and global tranquility. The only common ground here is that all concerned are on equal footing when it comes to playing the game, ‘blank’ on your neighbor. But it is reassuring that good and evil in international politics is equally balanced among the nations described in the report. And that is only because the likes of Iran and similar nations are not noticeably involved. Maybe they are a little less noisy with the fall of oil prices too.

Stanford Matthews
MoreWhat.com

European officials are taking a close look at how the United States is helping its ailing auto industry.

President George W. Bush welcomes Chancellor Angela Merkel of Germany to the Summit on Financial Markets and the World Economy Saturday, Nov. 15, 2008, at the National Building Museum in Washington, D.C. White House photo by Chris Greenberg

German Chancellor Angela Merkel says she wants to make sure aid to the U.S. auto industry will not put Europe’s own auto companies at a competitive disadvantage.

Merkel’s comments came at a news conference Tuesday in the northern Italian city of Trieste with Italian Prime Minister Silvio Berlusconi.

Carmakers in both the U.S. and Europe have been asking for government help, with French automaker Peugeot, Europe’s second largest car company, warning the global auto industry is in danger of a collapse.

Meanwhile, France wants to see a stronger international response to the global financial crisis.

In a statement released today, French President Nicolas Sarkozy says France will host a summit in January because world leaders must show they can offer “concrete solutions.”

At a meeting of industrial and developing countries last week in Washington, leaders only managed to agree on a set of principles to prevent the global economy from getting worse.

The Paris summit will be co-hosted by former British Prime Minister Tony Blair, and will include world leaders as well as Nobel prize-winning economists.

Reuters news agency reports International Monetary Fund Managing Director Dominique Strauss-Kahn says the list of countries asking for help is growing every day. And Russian President Dmitri Medvedev says his government may need to spend another $180 billion to stabilize the Russian economy.

Russia has already spent almost $200 billion on a series of measures to counter the economic meltdown. The World Bank today cut its growth forecast for the Russian economy in 2008 and 2009.

India is also worried about the effect of the global financial crisis on its economic growth. Finance Minister Palaniappan Chidambaram said Tuesday the government should cut interest rates. He also called on businesses to cut prices and accept lower profit margins to help stimulate the Indian economy.

The International Federation of Red Cross and Red Crescent Societies says the financial crisis is having an impact on donations from wealthy nations.

And migrant workers from the Philippines tell VOA the financial crisis is having an impact on how much money they are able to send to their families back home.

In 2007, Filipino migrant workers sent more than $14 billion to the Philippines, equal to 13 percent of the country’s gross domestic product.

Some information for this report was provided by AFP.

GOP bailout stooge to Cavuto: “It’s not your money” (Michelle Malkin) 

Toyota Reports Record Quarterly Profit

TOKYO (AP) — Toyota, hot on the heels of General Motors to become the world’s No. 1 automaker, reported a 7.3 percent jump in quarterly profit Tuesday on booming sales in North America and Europe that offset sluggish demand in Japan….

Let’s review. GM is in trouble. Ford is in trouble. In short, American automakers are crumbling. Not only Japan, but Korea and China are making cars as well as traditional competition from Europe and elsewhere. That is why the news story in the previous report was so laughable. Ok, it was actually sad.

C. Harris
MoreWhat.com

Officials: Ford to Resurrect Taurus Name

DETROIT (AP) — Ford Motor Co. will rename its slow-selling Five Hundred model the Taurus, a name Ford previously used for a car that became the nation’s top-seller, two company officials said Tuesday….

How stupid is this? Plan on NOT being able to “buy American” much longer. Get accustomed to names like Toyota, Honda, Subaru, Hundai, Kia. You say you are already? But that was by choice. If American automakers continue the trend it won’t be for long. And that Mercedes or other higher end vehicle will be outta reach too. Why? How are you going to buy it when all the jobs, pensions and social security are also, GONE!

C. Harris
MoreWhat.com

Another fantasy is revisited in Detroit this month with the opening of the North American International Auto Show displaying the pathetic decline of the American auto industry. Similar to the unholy alliance between the medical community and Big Pharma plus the FDA, there is the auto industry and Big Oil and the requisite government agencies, politicians and lobbyists. The United States was given a big wake up call regarding energy and oil shortages 30 years ago and the cavalier attitude of those not interested in noticing generated terms like tree hugger and belittled initial attempts to develop alternative energy sources. And now Detroit is promoting electric cars. That would simply prove how bleak the future looks in the motor city. In addition, the marketing strategies of the past, the public’s insatiable appetite for gas guzzling muscle machines and status symbols and the auto industry caving to the demands of once powerful labor union is responsible to the fix they are in now.

All of that plus getting in bed with the competition over the last 20 or 30 years will surely produce little or no sympathy from the public over the auto industry’s plight. The CEO of GM baking a cake and the claim of a car that gets 640 miles per tank is too stupid and too late to salvage an industry too ignorant, too lazy or too greedy to adjust to market forces or the reality of energy developments and difficulties. It must look incredibly easy to Toyota as they close in on becoming the top dog. This sad saga applies to more than the American auto industry. Change is necessary but won’t happen soon enough or solve the myriad problems allowed to continue within American business. The once dominant force in the world had better wake up. Simlar to what Yamamoto said, the sleeping giant had better wake up.

Stanford Matthews
MoreWhat.com

President George W. Bush meets with, from left, William Clay Ford Jr., Chairman & CEO of
Ford Motor Company; Dieter Zetsche, President & CEO of Chrysler Group; and Richard
Wagoner, President & CEO of General Motors Corp., at the Ford Community and
Performing Arts Center in Dearborn, Mich., Monday, April 28, 2003.
White House photo by Tina Hager

Bush: Automakers Face ‘Tough Choices’

Meeting in the Oval Office, President Bush told top executives of
Ford, General Motors and DaimlerChrysler he recognizes they
have “tough choices” in a difficult global environment and
promised a continuing dialogue with the industry.

Do Toyota, Honda and others have the same “tough choices” to
deal with or is this only a problem for American and almost
American clones? Why were the various “partnerships” started
about 25 years ago between American and foreign car makers?
Was it a noble experiment to revolutionize the global market or
an economical entrance to the American market for some and a
bailout of sorts for mismanaged or incompetent manufacturers
in the U.S.? Why would you invite your competition into your
home territory? How bad did you need the engineering to sell
out your company for short term profits? Was it just easier to
cave into union demands only to nearly go bankrupt a couple of
decades later? Maybe the US starts outsourcing entire industries
and the forward thinking morons of the recent past get vindicated
for their rash strategy that we will become a service only economy.
Only to again be impaled in public debate for the self-fulfilling
prophecy.

Stanford Matthews
MoreWhat.com