Bankruptcy Is The Right Option

The other day I stated one of my basic philosophies "Opinions should always be in flux, depending upon an open mind and what you discover", and I think I have reached that point with the domestic auto manufacturers.

For the past few months I have railed on how the government needed to step up to the plate and help our auto industry. I've tried to recite reasons that would only benefit our country and the working guy to take an action similar to what was done for the banking industry. I felt the auto industry was a victim of our governments lax attitude towards the cost of oil, unfair trade restrictions and blaming the auto industry for a lack of sales that was obviously the result of people being unable to borrow money at a reasonable rate.

I watched as the Presidents Auto Team, made up of money guys without a single car guy, came to Detroit to "assess" the viability of the automakers. After their report I watched President Obama say the plans they submitted for a "loan" didn't cut deep enough. They said the Big-3 was too fat, they needed to cut plants, workers and debt by 2/3, and they gave GM 60 days to accomplish this. Of course before they made this commitment essentially the President fired GM CEO Rick Wagner, because he knew Wagner was a strong personality, and replaced him with Fritz Henderson. Henderson started singing the bankruptcy blues from day one. They all but gave Chrysler the last rights and told them to go see if Fiat will save them. I then watched in astonishment as 30 days into the GM timetable Obama changed the rules again saying debt needed to be cut by 90% instead of 66%. As I told a friend yesterday that is like planning a 10 course meal for 6:00pm tonight only to have someone change the main course at 3:00pm. It's kind of hard to do. In fact almost impossible.

I've sat here an tried to figure out what the governments agenda was. Green cars? National health care? Greater dependence upon a centrist government to survive? It all made sense yet none of it made sense.

Since the year 2000 the domestic auto industry has lost over 428,000 jobs with nearly 50% of those being lost in the last 3 years. I have been staunchly against any of the Big-3 filing bankruptcy because of the ramifications that action will have upon their retirees, employees, and the ripple effect through their support system of suppliers.

But as I said in the opening paragraph, a persons thought must remain in flux depending upon what he or she learns. In the last few days what I have learned is General Motors should be changing its name to Government Motors. When this is all said and done we have a General Motors that is a mere shadow of itself, with the government appointing members of the board, not run by the majority of the stockholders but run by the government and the union. Not only is that wrong on so many levels, it goes against the concept of "free enterprise". How is Ford, who didn't take a dime of government money supposed to compete with the government? I'm not saying that, Bill Ford Jr made that statement the other day.

The government has pushed GM to cancel the Pontiac nameplate and brand. How does that help things? What difference does the trim package and name make in a car? Well, if you've owned 7 Pontiac's the way I have, perhaps a lot. Will the government now be directing the engineers and designers as to what cars you and I may chose from? It's starting to look that way. In fact I've heard they are already taking deposits for the 2011 Pelosi Hybrid, it runs on bull manure and wax, man! And on top of it all they still may have to go through bankruptcy anyway, but we're going to have a "bad" GM and a "good" GM. What is that?

Chrysler on the other hand seems to be close to a deal with Fiat that gives Fiat 30% of the company for free (BTW I'll do that too if you'll let me), the UAW will control 52 percent and the government will control the balance. Sweet.

Well gang all of this has convinced me that both GM and Chrysler should waltz into the Federal Building in downtown Detroit next Monday morning and file chapter 11. They have nothing to lose, their stockholders have nothing to lose, plus you and I have nothing to lose. Those states, like Michigan, that depend heavily upon the auto industry are already ruined and with the size of the new GM, any form of recovery is years away. Those that have lost their jobs have already been ruined financially, and I would suggest they line up right behind GM and Chrysler at the clerks desk on Monday to file papers.

I don't say this tongue and cheek, and I certainly don't take my words lightly but the bottom line is 2/3's of the Big-3 is going to be run by the government. And we all know how well the government runs things! The die was cast 20 years ago when Reagan began to speak of NAFTA and it was pushed along by Bush Sr, and then Clinton. Since that time Clinton, Bush Jr and now Obama have used the lingering effects to work their own personal agendas with no thought about the lives that have been ruined along the way.

I would rather have GM and Chrysler file bankruptcy, and come out clean to control their own destiny, than to have the government corrupt the concept of free enterprise. For without free enterprise we are no longer capitalist, and we are no longer the United States as we knew it.