This week’s debate is whether to bail out the auto industry. People are dwelling on the obvious instead of attacking the problem. We all already know that the situation is as it is because of management failure. Stop talking about it. Did labor have a hand in it? Sure. We know that too. Stop talking about that also.
All three of the US companies are loaded with fat. Waggoner of GM boasts that he burns $ 75,000,000 a day. He also says he isn’t leaving and that if his departure is a condition of funding a bailout, forget about it. The arrogance defies comment. But that is a great depiction of what brought the industry to today. It isn’t any different at Ford or Chrysler. They also brag that they are four deep in every management position. They have almost as many planes as the military. They live as though they were competent. It is outrageous on the present facts.
One debate is whether they should file for bankruptcy before funding is provided. The answer to that is a resounding YES. There is no other fast way to their weight loss. Bankruptcy will enable what cannot be done otherwise. Bankruptcy will not adversely affect their prospects. Nothing could more drastically and adversely affect their prospects than what they have already done to themselves. Their business relationships will not change, except for what needs to go anyway. Bankruptcy will actually make their prospects better and enable their recovery on far less taxpayer money. Since management at all the companies is incompetent, oversight is necessary, and replacement of the head bozos would be preferable. There is far too much bad business doctrine at work in this industry, and it all comes from management inbreeding.
They will not willingly bring in any outside resources unless the resources agree with them. That is not a positive prospect. Nourishing the disease never cures the patient.
It is too bad that Barney Frank doesn’t understand the benefits of bankruptcy. He hasn’t even a clue. If his ignorance is the guiding light to remediation, don’t expect this to work out soon or efficiently. Do expect it to cost as much as possible.