The Big Three Take a Hike to Washington
By Bonnie Erbe, Thomas Jefferson Street blog.
I love it! The Big Three's CEO's were forced to live like the rest of us yesterday as they headed to Washington, D.C. to beg Congress for a total of $34 billion to keep Detroit in business. But this time, instead of flying in on corporate jets, or even (perish the thought) flying first or business class on a commercial airline, the image-tarnished titans drove. And drove hybrids, yet:
Ford's Chief Executive Alan Mulally was on his way to the nation's capital on Tuesday afternoon, in a Ford Escape hybrid. A spokesman declined to say if the 10-hour trip would include an overnight stop. A GM spokesman said CEO Rick Wagoner would also travel to Washington by car: a 2009 Chevrolet Malibu hybrid.
Based on average gas prices of about $1.80 a gallon and fuel efficiency of about 27 miles per gallon, the cost of the round trip would be about $70 in gas. Tolls are extra.
By comparison a round-trip, business-class ticket from Detroit to Washington is roughly $1,400. Coach airfares run about $300.
Perhaps if they have to drive the vehicles they've been foisting on the American public all these years, they'll improve the quality of American production. What a concept! The PR stunt has apparently already worked—that, or lobbying by the UAW. House Speaker Nancy Pelosi on Tuesday told reporters that Congress will not allow the automakers to fail:
"I believe that an intervention will happen," Pelosi said at a briefing in Washington. "Everybody is disadvantaged by bankruptcy, including our economy, so that's not an option."
Pelosi said Congress will either approve new loans for the auto industry or the Bush administration will provide funding through the $700 billion financial-markets rescue plan approved by Congress last month.
Pelosi's counterpart in the U.S. Senate, Majority Leader Harry Reid, says he will have a bill on the Senate floor by next week that could bailout the big three if the CEOs and Congress reach agreement on what should be done. What a difference a drive makes!
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Tags: General Motors | Chrysler | car manufacturers | Ford
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Reader Comments
Big 3 bailout - gotta do it!
I am not a fan of U.S. automakers, but I believe a bailout is necessary to not only save millions of jobs and lessen chance of a deeper recession, but to maintain one of the U.S.'s biggest manufacturing industries. Opponents say let them go bankrupt, reorganize and come out leaner and more focused; and point to other successful bankruptcy recoveries, like some airlines. Or say, that if we bailout Detroit, why not Circuit City or DHL. These comparisons are totally falacious. The Big 3 automakers are among the top 10 U.S. corporations, with combined annual revenues of over $400 billion. They make and sell 15 million cars each year, despite their loss of market share. Half of the cars sold in U.S. are still American cars. Their total effect touches millions of American jobs throughout the country - thousands of dealers, suppliers, distributors, retailers and more. Their effect is 20 to 50 times that of a company like Circuit City or an airline. Additionally, since a car purchase is the largest purchase a consumer makes, other than a home, it is looked at differently than buying a TV or plane ticket, in terms of the viability of the company. People will not invest in a $20,000 car from a company that may be gone next year. Issues like maintenance and warranty, and resale value will all be greatly effected, and be a major deterent to buying from a bankrupt company.
Just as important, is the need to save manufacturing in the U.S. At one time, the U.S. was the leading manufacturer in most industries - textiles, food, steel, chemicals, oil & gas, autos, electronics, computers, medical, aerospace, etc. America's dominance in manufacturing in the 20th century, is what made it the most economically powerful country in the world, and established the world's largest middle class. As we loss manufacturing jobs, and become a more service-oriented society, we lose quality, well-paying jobs. This will ultimately impact our economic well-being for most Americans.
We cannot afford, either in the short term or long term, to allow the U.S. automobile industry to fail.
Where will it stop?????
Where will it stop. Ok, I'm from Michigan, and I have family who work for the big 3 or have in the past, and I still say...NO BAIL OUT....wait till your a month away from going bankrupt and then let's have the goverment bail us out...NOT...
And that great UAW leader, he is willing to make concessions to help the big 3... oh ya.. not going to effect the present employee's he represents, but LETS throw the retired members under the bus.. give me a break..
If congress decides to give Detroit 3 a bailout, I say make the CEO'S all resign and leave witout compensation...(they got them where there at) and the presidend of the UAW must resign, and then maybe just maybe.. help them out.
So This Michigander says,,, let the dogs out.. and let the Detroit 3 either make it on their own or fail..
God Bless America
Big Three
Where will it end? Remember the good old days of the Cold War ending, when we crowed to the world about the superiority of our so-called free market system? Hah, where is it now? Capitalism is based on greed, as Communism is based on total control of people. Neither system will ever be perfect, as the Chinese have discovered. But this is just too much, coming right on the heels of the banking/housing scandals. Why bother to work at all, run your company into the ground, then go for Chapter 11, and beg for others to bail you out! Reminds me of a news story a couple of years ago where the US Army was trying to close a factory that made chemical weapons. Many wanted it kept open, as it employed locals from the surrounding areas, who stopped farming to work at the plant! There has to be some adult in the new administration who will stand up and, in the words of a famous First Lady say: "Just say NO"!
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