While reading the paper this morning – and yes, it was an actual newspaper, not a website – I saw an article explaining that the major automakers were in desperate need of their own government bailout. Without $25 billion from the Feds, automakers including Ford, GM, and Chrysler were in danger of bankruptcy.
Now, I’m not totally heartless, and I understand that their going under would both inflame a nasty recession and harm multiple millions of retirees, but shouldn’t these companies be allowed to have problems, and why is the only answer a handout from the government?
Let’s say you’re a musician. You’re reading this, so odds are you might be. You’re down to Ramen Noodles and Tang for your daily cuisine, and you’re not sure you’re gonna be able to pay rent this month. You dont own a car (and if you do, it needs a lot of work), and your savings amounts to the coin jangling around in the dryer at your local laundromat. Another month of this, and you’re done for. The economy sucks, so in the eternal decision of food vs fun, folks are choosing food instead of a night out to see live music.
The advice you’ll be given (most likely) is to find new ways to enhance your income – try selling on iTunes, or maybe you should try giving music lessons, or maybe you just need to write better stuff. Either way, the challenge to you is to revert, revise, or at least re-reimagine what you could be doing. Why isn’t this answer applicable to the auto industry?
The last American car I drove was a 1995 Ford Probe GT — I loved that car. It was awesome, and it was pink. Seriously. Since then, I haven’t seen an American auto worth driving. For style, safety, or features, there’s nothing to compete. The Japanese and the Germans have a better product — so that’s what I get, and those companies seem to be doing ok — not great, but at least ok.
Without trying to sound like a cruel, heartless bastard, these automakers are HUGE corporations, and should be responsible for the decisions they make. I’m guessing that their CEOs took home enormous and exorbitant salaries. Here’s an example:
The CEO of Chrysler only makes $1 in salary per year. Any bonuses are based upon company performance. Sounds rosy, right? Well, he’s only doing that because previously he ran Home Depot. “Nardelli angered Home Depot shareholders when he refused to take questions during a shareholder meeting in May 2006 as the stock was floundering. His rich pay package drew fire; he earned $38.1 million last year. Ultimately he was forced out of the company in January 2007, but left with a $210 million golden parachute in cash and stock options that included a $20 million severance payment and retirement benefits of $32 million.” (CNNMoney.com 8/2007)
So this guy LEAVES his job with $210 million in cash.Now he only officially makes $1. Funny how Chrysler won’t disclose the rest of his package. Do you really think he all he gets is a buck?
Over at Ford, Allan Mullalley earned $39.1 million in FOUR months from Sept. – Dec of 2007. (www.truthout.org), and at GM Rick Wagoner earned $15.7 million as his company lost $39 billion in 2007.
I’m sure these guys all work very hard, but when your companies are losing billions of dollars, shouldn’t you feel just a tad guilty? These guys don’t deserve bailouts. And their companies are hardly fledgling startups.
