The Fate Of The Big 3 Automakers
December 2, 2008 – 2:13 pmI find a lot of things irritating, and although I don’t comment on most of these items I must rant for a minute. The big three auto manufacturers are currently working on turnaround plans in preparation for another meeting with congress later this month. They originally asked for a $25B loan in order to cover their cash needs until the economy turns around.
Am I the only one that thinks this whole ordeal has stupid written all over it? Seriously. Here are just a few ideas to ponder:
- Who can know that our economic troubles will be over in 2 years? Most of the time the leading economists at NBER can only call a recession after it’s ended!
- Isn’t this the equivalent of a “layoff” loan? I need cash but I don’t have a job, so please loan me some money to get through these tough times and I promise I’ll pay you back.
- Why was such a big deal made out of the fact that the CEO’s flew to Washington D.C. in their corporate jets?
Today the big 3 announced that the CEO’s would be driving to Washington D.C. next time. No real plans for how to turn their businesses around. Just a travel plan and some useless PR.
I don’t care if the three take their private jets to D.C. or all decide to carpool in a Toyota Prius. I’d just like our elected officials and stewards of shareholder value to keep their eye on the ball. What we need is smart people spending their time in an efficient and productive manner. What I don’t want is three highly compensated professionals to spend two days on a “Dude, Where’s My Car”-style road trip just so they can appear like the “average joe” when then speak to congress. After all, how many average joes have an appointment with congress anyway?
And for all of the discuss on private jets and financial woes, hasn’t anyone thought to actually use a bit of critical thinking? After all, a corporate jet is a sunk cost. Sure you can sell it and get something for it, but it’s likely a sale in this environment would lead to a loss on that asset.
Please tell me that news outlets have missed the important meetings where actual, logical decisions get made. Perhaps the outcome of such meetings were too reasonable and prudent to be worth reporting.
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