GM, Ford and Chrysler were the latest to lobby Congress to help them help us save the economy (sarcasm intended). Rick Wagoner, GM CEO, stated in written testimony “This is about much more than just Detroit, it’s about saving the U.S. economy from a catastrophic collapse.” How noble. The situation was so dire, Wagoner, et. al. had to fly in on their corporate jets to avoid having to pay the $25 luggage charge on commercial airliners. I hope everyone appreciates that $75 cost savings.
Didn’t the execs from the financial sector give us the same song and dance? We threw taxpayer money at the financial sector and it did nothing but send our portfolios south. Since a downturn in defense spending will soon be upon us, I guess we’ll expect to see all the defense companies in line with their hands out as well?
I was going to do my part and buy a new SUV in the next couple of months. Mine has 60K miles on it and it’s ripe for trade-in. I went to Cadillac to check out the 2009 models expecting to see lower prices (to reflect the economic conditions and the desire to move inventory). The 2009 Escalade is almost $80K! Keep in mind that the high cost of these vehicles is not because of high end materials, it’s due to the high labor costs. Cadillac did the right thing by making hybrids, but they have overpriced them to the point nobody will buy one. Needless to say, I’ll wait for the $20-30K depreciation to get my 2009…
Back to the bailout. The auto companies are asking for at least $25 billion of our money. When asked what they will do with the money, they didn’t know. I heard someone say “let’s hold a lottery and raffle off 1 million $25K cars”. Sounds like a better plan to me then sending all that money to companies so they can continue to mismanage it.
IMHO there are two choices: let the auto companies go Chapter 11, restructure, and start making a superior, environmentally friendly, and economical product – or – throw more money (our tax money) at them to continue executing a failed business plan. I predict the latter option will be the end of the U.S. auto industry and I will have to buy my first foreign car.
