Today's Detroit News carried a good article by Daniel Howes on the loans for the auto companies, and focused on what I think is the larger implication for the industry and the nature of government in our country. Here are some highlights:
This is what you get, Detroit, when the government becomes your lender of last resort -- a business plan designed to score political points, which means no bonuses for the top execs and no corporate aircraft (leased or owned) for as long as Detroit's beleaguered automakers owe the public money, which could be three years but probably more.
Also required is compliance with federal and state fuel efficiency requirements to develop alternative technology vehicles, no dividends for shareholders, restructured balance sheets, and no legal challenges to strict state greenhouse gas emissions rules. And, my personal favorite, agreement to assess the viability of converting SUV plants to the production of buses and rail cars for use by public transit agencies.
No wonder Ford Motor Co. doesn't want any part of the $15 billion morass taking shape in Washington. It gives new meaning to the term "loan shark," however predictable it all is, considering the political agendas inside Congress and, second, the abject financial weakness of General Motors Corp. and Chrysler LLC.
I'm not sure which is worse: A federal government presumptuous enough to think it can transform one of the country's most complex industries in a little more than three months. Or one readily prepared to use its emergency financial power to shape an industry and steer it toward political ends that may or may not reflect market demand.
Each step in this process feels more strange than the last -- a first round of congressional hearings that gave new meaning to the term "clueless Detroit," a second round long on detail and even longer on groveling, stunning ignorance in Washington of an industry that accounts for millions of jobs, an uninterested White House and, now, a bailout bill that reads as if is was drafted by Greenpeace and Soviet central planning.
The congressional committees that wrote a $700 billion financial bailout package, lent $150 billion to AIG and pumped $20 billion into Citigroup demand detailed plans from the automakers and four days of hearings for what's shaping up to be $15 billion in loans.
Or the chairman of the Senate Banking Committee, Chris Dodd, D-Conn., suggests Sunday that GM Chairman Rick Wagoner should "go" and make way for new leadership because the current one led GM off a cliff.
This from the senator who blocked reform of Fannie Mae and Freddie Mac three years ago, was their top recipient of campaign cash, pocketed more than $300,000 in contributions from PACs and executives tied to Citigroup and then spearheaded the legislative effort to craft the financial rescue package.
Yet in the world where Detroit's future lies, such irony doesn't matter. Perception, politics and calculated remarks masquerading as offhanded ones do.
There are some really good points in here. My person favorite piece of analysis was on how the loan bill that Congress is writing looks more like it was produced by a combination of Greenpeace and the Soviet Union. There is actually a lot in there. Think about what Congress is bribing companies to do with taxpayer money- submit the the watermellons of state control. Our government is using our money to put in place a regulatory structure that would make the Nazi's or Soviet's envious, and what is even more sad is that citizens are clammoring for it to be done. When Congress passes this deal with the devil bill, everyone will clap, and the Republicans and people who voted no will look like the bad guys. Bizarro world strikes again!
The only thing that provides me any comfort is that I am not the only one totally pissed off by this whole process. Over at this blog, the blogger is so upset he has basically shut down posting in the face of this relentless environmental-fascist legislation. Is anyone else out there as pissed as me? Email me and let me know that I'm not alone!
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