Daniel Howes: Commentary

Symbols behind loan smackdown

Congress didn’t officially tell Detroit’s automakers to "drop dead" Thursday, but it came close.

Around 11 a.m., the industry lost its staunchest defender, Rep. John Dingell, D-Dearborn, to an intraparty squabble symbolizing a war between liberal Democrats tied to anti-Detroit environmental groups and more conservative members allied with the United Auto Workers in the Rust Belt. The environmental wing won.

An hour later, General Motors Corp. Chairman Rick Wagoner says he was encouraged to see on the TV news that the so-called "auto state senators," led by Michigan’s Carl Levin, D-Detroit, had reached a bipartisan compromise that would speed a publicly financed $25 billion in "bridge loans" to the automakers.

Two hours later, there was Senate Majority Leader Harry Reid, D-Nev., and Speaker Nancy Pelosi, D-Calif., saying no, not yet. Detroit’s CEOs, fresh from their lackluster performance in the world’s biggest political fishbowl, would need to submit plans to Congress demonstrating their viability in exchange for the cash.

Talk about a smackdown. Prepared testimony, two days of hearings before a national audience and the Congress of the United States essentially says "not good enough" to Detroit’s automakers. Then it says committee chairs with the names Dodd, D-Conn., and Frank, D-Mass., will bless — or reject — your turnaround plans, effectively setting the course for the American-owned auto industry for years to come.

Yikes. But Congress also said this: You didn’t bolster your credibility this week as much as you need to if you want a bailout. We’ll give you another shot at this because we’re in power and we don’t want you to go bankrupt. So don’t screw it up.

Big Three needs to dig out

As scary as this is for what it says about the a) deep, potentially fatal sickness afflicting Detroit’s automakers and b) the deeply sickening injection of politicians and their arcane agendas into business planning, it shouldn’t be entirely surprising. The Big Three bosses mostly bombed in two days of testimony on Capitol Hill and their near-term financial prospects are even worse.

Instead of giving skeptical members of Congress good reasons to green-light plans to approve billions in direct loans to GM, Ford Motor Co. and Chrysler LLC, the CEOs muffed questions about their pay — and that was just the beginning.

United Auto Workers President Ron Gettelfinger forgot he wasn’t talking to a Michigan Legislature accustomed to the union’s ’70s-era riffs on "sacrifice." This is a country where 7.5 percent of the private-sector workforce is unionized, hardly evidence of a majority.

But the CEOs? They muffed it worse, first by walking into a cheap political trap about the use of corporate aircraft. They failed to show how their companies would revive with the help of taxpayer money. And they showed a stunning misunderstanding of symbolism in an overtly political arena.

Symbols matter in bailout

"The importance of substance is critical," GM’s Wagoner told The Detroit News on Thursday, "but the importance of symbol is, as well. We understand that."

Now? If these guys want to coalesce their troops and, perhaps, some of the general public around their government-financed rescues, they’ll need to get serious about publicly eliminating some of the perks that most of corporate America lives without. They’ll send a message and — gasp! — save some dough in the process.

Where was Ford Motor Co.’s pledge to close its executive dining room? Why didn’t General Motors Corp. pledge to suspend its executive-car programs, complete with free gas and insurance? Did any of the CEOs even consider flying to Washington on Northwest Airlines, preferably in the back of the plane?

Probably not, but I’m guessing they’ll be reconsidering after the blowback this week.