OUR POOR AUTOMOBILE INDUSTRY

MORALITY AND THE LAW CLXVI
By Stephen Ellis

OUR POOR AUTOMOBILE INDUSTRY

Nobody asked me, but…

It is very doubtful, at this time, if anyone questions the fact that Obama plans to hit the Oval Office running. He has put together an incredibly diverse Cabinet filled with absolutely top qualifiers. In fact, the Obama Cabinet should be able to help this country get itself straightened out. Certainly it is a hundred times higher quality Cabinet than we have had in Washington for the last twenty or thirty years.

As good as this “Super-Cabinet” team is, there are very major problems facing them that need to be addressed quickly:

Let’s look at the facts concerning the automobile industry: This is America’s largest business. It used to control the world’s auto market, but its world control was interrupted by (first) the Japanese Toyota, then other Japanese cars, then the German cars, etc. The problem with the American automobile industry was that it had become stagnant. The cars they were selling were inferior to those being imported. Instead of rising to meet the new challenges, the top execs at Ford, GM and Chrysler wanted “business as usual”. The result was very foreseeable: The Japanese and German car manufacturers passed the American manufacturers and left them in their wake. By the time the American car manufacturers started to rise to meet the competition, American car sales had fallen well below the profitability mark and the U.S. auto industry was “in trouble”.

The U.S. auto manufacturers have (finally) gotten it together and started to make cars as good as…and even better than the imported competition. But they’ve run out of money. It will take years before the public confidence in American made cars starts to return.

So, what do we do?

The U.S. auto industry has come pleading to Congress for loans to give them the chance to rebuild and reestablish themselves as world leaders. Congress has been slow to act, and it’s hard to blame them for acting slowly. The automobile industry has to re-prove themselves. At least 90% of the top executives have to be set free (without golden parachutes) and the people who fought for and finally got the auto industry to start changing and catching-up should be the new leaders…but not with the multi-million dollar salaries and benefits the former executives had.

Most important: Our government has to establish a commission (not politicians, just business people) to oversee how the money is being spent! If the government just grants them the loans without oversight, the money will be flushed down the toilet with the other hundreds of billions the auto industry has wasted.

If you want to know what happens if there is no governmental oversight, just look at our banks. The “brilliant” Henry Paulson (Treasurer of the United States) gave half the $700,000,000,000 bailout money to the banks and the Wall Street firms on the theory that if the banks have a lot of money, it will ease credit and credit will be available to everyone…thus curing the recession. Paulson felt that no oversight was needed.

So what happened? Citi Bank fired 63,000 employees just before Xmas. Bank of America refused to give loans to automobile suppliers and thousands of other companies forcing them into bankruptcy with the loss of hundreds of thousands more jobs.

O.K. The banks got “fat”…but they’re keeping the money to themselves and not using it as it should be used. They’re doing absolutely nothing to help us dig our way out of the recession.

The automobile industry tells us that they don’t want a hand-out, they want “loans”. Interesting that although the banks are 200 billion richer, no bank will offer any auto manufacturer a loan. No Wall Street firm will underwrite any new financing.

Oversight is absolutely essential! Paulson is just too stupid to realize this. Of course the fact that he is a Bush appointee, makes his stupidity understandable.

If the U.S. automobile industry is allowed to collapse, not only will millions of jobs be lost; not only will all the suppliers of auto parts, auto interiors, tires, etc. collapse and be forced into bankruptcy. It is a “sure-bet” to turn our recession into a full-fledged “depression”.

Money has to be loaned to the auto industry…and the use of the funds has to be supervised.

There is still no creative or innovative factor like the American mind anyplace else in the world. The American initiative is still there. It’s going to be in Obama’s hands to give it the opportunity to re-assert itself.