The Big 3 are starting to be reminiscent of that relative or friend we all have that no matter how much money or help you give them, they always come back asking for more, shamelessly, without pride.
The United Auto Workers walked out of talks on Friday and Saturday with the Big 3 (General Motors, Ford, and Chrysler) United States and Detroit-based Automakers because they did not like the conditions of the reorganization that was presented to them.
Fancy that, huh? Imagine that the UAW thinks that they are in a position of great strength considering they got their friend and benefactor, President Obama, in the White House now. Wasn’t it UAW President Ron Gettelfinger who told Senator Bob Corker after the Senate-backed Auto Bailout failed that “we’ll just hang in and see what Obama and the Democrats will do for us…”?
The funny thing is, without the Bush Administration backed diversion of $13billion in TARP money to GM and Chrysler, neither of the two organizations would still be viable or solvent today (both adjectives that can arguably be erased from their description), and now all three of the Big 3 claim they need more help (Ford heroically did not accept a government bailout back in December). Not to mention the Motor & Equipment Manufacturers Association, also doing business as “The Parts Suppliers”, want $20.5Billion for themselves.
The first phase of the GM/Chrysler reorganization–as in, the first draft of “The Plan”–is due Tuesday, but like the geniuses in Detroit are known for, they failed to even begin working on “The Plan” until last week, and the UAW has not made negotiations for concessions any easier, as they realize the time constraints now allow them to simply stall and delay, for which GM and Chrysler could very well pay dearly later this week.
Apparently GM is not confident in their chances to secure additional government funding, as they are already consulting on the next phase of their existance, tentatively titled “The Collapse”, which will include swift and immediate bankruptcy. If the US Government is not happy with the (lack of any clear) progress made in the “reorganization” of Chrysler and GM, they could be forced to repay the $13Billion in TARP funding they have already received, at 5% interest to begin with, and going up to 10% if they default. The move to go directly to bankruptcy if “The Plan” is not well-received means that GM is already planning to try and swindle the US Taxpayers out of the money they have already taken from us, in true moocher and looter style.
In November and December of 2008, the case was made that GM/Ford/Chrysler was so important for the US Economy that there was no way that we could endure the loss of jobs and economic impact of their collapse. Ron Paul had a very interesting take on that assesment, “In bailing out failing companies, they are confiscating money from productive members of the economy and giving it to failing ones. By sustaining companies with obsolete or unsustainable business models, the government prevents their resources from being liquidated and made available to other companies that can put them to better, more productive use. An essential element of a healthy free market, is that both success and failure must be permitted to happen when they are earned. But instead with a bailout, the rewards are reversed – the proceeds from successful entities are given to failing ones. How this is supposed to be good for our economy is beyond me…. It won’t work. It can’t work… It is obvious to most Americans that we need to reject corporate cronyism, and allow the natural regulations and incentives of the free market to pick the winners and losers in our economy, not the whims of bureaucrats and politicians.”
GM has a monthly cash burn of more than $3Billion. They have not made one step forward in reducing this incredible to fathom cost overage, they have not restructured their debt/equity/legacy situations, nor have they been able to reach a concensus with the UAW.
We should just let these dinosaurs die. They have proven time and again over the course of the last 30 years that they are unwilling to change even the most basic of their business practices, and everyone who would suffer from the collapse, including every single member of the UAW, is to blame for their ineptness.
As Gary Ackerman asked on November 19th, 2008, “Maybe you can tell us what you’re actually going to do to sell cars people want.”
Or, the more pressing question as of this time, let us echo Michael Capuano’s statement, “My fear is you’re going to take this money and continue the same stupid decisions you’ve made for 25 years.”
(*This article was originally published February 16, 2009 on the Yahoo Contributor Network)