Just Say No!

No, this is not a reference to Nancy Reagan’s message to children about drug use. It is, however, a message nonetheless; one that’s directed to President Bush, Congress and President-elect Obama.

Just say “no”… to more bailouts!

By now, you’ve all seen the headlines about the terrible condition of the Big 3 automakers:

General Motors: Market share reduced to barely 20% (in the 60’s it was over 50%), publicly acknowledged the likelihood that they may run out of cash by the end of next year’s first quarter, a 45% drop in sales in October and rumors that the stock price will soon hit zero.

Ford: Another quarter showing multi-billion dollar losses and a 30% drop in sales in October.

Chrysler: Just cut 25% of their salaried work force and experienced a 33% drop in sales during the month of September.

Here’s another thing they all have in common; they’re all going to Washington with their hats in hand, to try and squeeze another $25 billion out of Uncle Sam. I say “another” because they just got a $25 billion loan from Congress in September!

Hey Big 3, how’s that loan working out for you guys?

Crickets…tumbleweed rolling by…more crickets…still more crickets and some more tumbleweed just rolled on by.

Yeah, that’s what I thought! It did nothing! In fact, since they got that $25 billion, things have gotten worse.

So why in the world are we considering giving Detroit a taste of the $700 billion financial bailout package?

So, if we give them even more of our money, they’re suddenly going to figure everything out? If we give them more of our money, they’re suddenly going to produce quality cars that Americans want to buy? If we give them more of our money, they’ll suddenly be out from under the crippling benefit and pension packages negotiated with the UAW (United Auto Workers Union)?

Right…

By the way, wasn’t that $700 billion supposed to be reserved for the financial industry? I guess that’s another discussion for another time.

But back to my message: to everyone in the Government, please stop throwing good money after bad and stop granting these bailout packages to every Tom, Dick and GM that ask for them!

We’ve already bailed out the financial system and the airlines. If we commit even more tax dollars to Detroit, I’m telling you the floodgates will open. You’ll start to see any business that’s failing come to Congress, pleading for a bundle of cash right out of the taxpayer coffers.

First up, American Express. Next? Circuit City. After them? Starbucks. Behind them? The Newspaper industry.

This dangerous precedent of helping any company or industry that’s failing is leading us further and further down the road of a Soviet-style planned economy. And we all know how that worked out for the Soviets…

Listen, if Washington really wants to help these automakers, why don’t they just repeal some of the restrictions they placed upon them?

They can start by easing emission restrictions and mileage requirements. Due to these measures, automakers have to build hundreds of thousands of small cars that nobody wants to buy. If they were able to focus as much of their resources as they want to the production of SUV’s, you know, cars that actually turn a profit, they may actually be inching out of the red instead of spiraling downward into it.

To understand this point, just look at the numbers. Chrysler lost (yes, you’re reading that correctly, lost!) $412 per vehicle in 2007. GM? They lost $729 per vehicle made. But Ford takes the cake, losing a whopping $1,467 per vehicle in 2007.

Government restrictions are just the beginning, however. The real money crunch comes from the benefit and pension packages given to UAW workers. But don’t expect any help from Washington with this mess. With President-elect Obama’s stance on unions (the elimination of the secret ballot, giving labor the extreme upper hand in the workplace) and Congress’ ignorant stance on wages and executive compensation, these labor worries are probably just the beginning.

In fact, in a letter sent to Treasury Secretary Henry Paulson asking the secretary to grant funds to Detroit, Henry Reid and Nancy Pelosi did not once mention the crippling effects unions have had on the automakers situation. They did, however, choose to mention that taxpayers would be spared by limiting “executive compensation”.

(Sign)

Yeah, that’s been the problem all these years. Auto executives have been making too much money. Well, problem solved! Well done Mr. Reid and Mrs. Pelosi! Happy days are here again Big 3!

Please! Is it too much to ask to have elected officials that have a small semblance of a clue when it comes to the economy?

Here’s an idea for the Big 3 automakers: instead of countless commercials touting 0% financing and deal after deal after deal, how about an ad campaign focusing on the quality of the cars they make? You know, instill a little confidence to the market.

Look, I don’t want to see these automakers fail. I don’t want to see upwards of 2.5 million jobs lost if all three companies close up shop.

At the same time, however, I am not about to back a plan that subsidizes yet another failed industry for the sake of saving jobs. That is not the role of government! Additionally, it is not the role of the taxpayers to bailout a group of people that have guided this once proud industry to the perilous fate they now face!

This policy of handouts has to stop at some point!

On a side note, you know, if the Big 3 go out of business, we’ll still be able to buy cars…good ones too. Incidentally, all those “foreign” Toyotas and Hondas on the road now are usually assembled right here in America, by American workers.

That’s all for now folks. Until next time, take care and be well.

-John