Big, fast gas guzzlers (in bed with big oil?)
“The big and the fast beat the small and the fast. If you check out the NBA today, they’re big and fast.”
This is a quote from Rick Wagoner, General Motors CEO. It is Wagoner’s analogy to the automobile industry – big, fast, gas guzzlers.
Wagoner has run the world’s largest automaker into the ground for the past eight years, losing a mind-boggling $73 billion in losses beginning in 2005.
“We made mistakes, which we’re learning from,” Wagoner admitted during the Congressional hearing.” Nice to have a CEO, who worked in the industry for 31 years, just learning from his mistakes.
60% of Americans oppose bailout
Wisely, 60% of Americans oppose giving a cent of bailout money to GM. Even Bill Gates voiced his opposition on CNN, yesterday.
Paper napkin plan
GM’s recovery plan, as presented to Congress, could fit on a paper napkin.
In the plan, GM said it will take significant steps to restructure by 2012 — including cutting 21,000 to 31,000 more hourly and salaried workers, closing nine plants and slicing 1,750 dealer locations. These cuts would drop the number of GM workers nationwide to 65,000 — down from 191,000 in 2000.
GM hopes their paper-napkin plan – achieved only at some future date – will convince lawmakers to give it up to $18 billion from the government: $12 billion in loans, including $4 billion by the end of December, and a separate $6 billion line of credit in case market conditions worsen. And worsen they will. U.S. auto sales plunged 37 percent in November to their worst level in more than 26 years.
Why the paper napkin plan takes so long
2012 is four years away – the year when Obama could conceivably be running for president against Sarah Palin.
Why so long for the “plan” to work? Japanese auto makers with their computerized plants can retool on the fly – GM takes years to retool, by doing it the good old-fashioned way – rebuild the plant.
Apparently GM’s CEO, Wagoner, has not learned this lesson.
Instead of bailing out GM, why not just buy it? You could buy ALL the common shares of stock in General Motors for less than $3 billion. Why should our government give GM $18 billion or $25 billion or anything? Take the money and buy the company!
The rich get richer
Now Rick Wagoner and the other CEO’s are willing to work for $1 a year. Easy for Wagoner to do, as he has been making about $20 million a year – for a long time.
This bailout, like the Wall Street bailout, was not fashioned to make the rich richer, but to make sure the rich don’t get poor.