Chrysler, GM battle for future
Chrysler, GM battle for future
In the annals of meaningless political gestures, few could top that of a Texas Republican coming to Detroit and complaining about the United Auto Workers.
That the best you can do, congressman? Rep. Jeb Hensarling is the lone lawmaker on the Congressional Oversight Panel, whose hearing Monday at Wayne State University aimed to determine how Detroit’s Troubled Two are spending the billions dispensed to them by the Troubled Asset Relief Program.
Who cares if a representative of the union leadership showed — or that the likes of General Motors Co. and Chrysler Group LLC had the temerity to dispatch their lowly treasurers instead of the CEOs whose predecessors begged last fall for federal intervention?
The political decision to fund the economic rescue of GM and Chrysler was decided months ago by the Obama administration and its allies in Congress. Their de facto bid to control vast swaths of the private sector — and trample the rights of private investors — has moved from autos and banking to energy and health care, which alone accounts for 20 percent of the U.S. economy.
What matters, and what will determine whether the American taxpayers will see a dime of payback from their $80-some billion bankruptcy and financing rescue of the automakers, is whether GM and Chrysler actually execute the turnarounds they promised, whether the union’s concessions really have leveled the playing field with foreign rivals and how much the national economy will help or hinder the effort.
None of those three conditions is even close to being the sure thing that Detroit so desperately needs to halt its decades-long tailspin.
Worse, too many politicians of both parties are grandstanding by fighting the proverbial last war — when they aren’t directly meddling. GM and Chrysler are closing some 3,000 dealerships between them, but a majority of the House wants to reverse the move because deep-pocketed dealers in their districts are demanding they do so.
The likes of Rep. Barney Frank, D-Mass., politicks GM to keep open a Boston-area parts depot. Republicans from the Southeast to Texas complain that the bailouts amount to little more than the Treasury using public money to buy GM and Chrysler out of bankruptcy and then handing large ownership stakes to the UAW, chiefly to preserve their costly retirement benefits.
Complain all you want, folks. Question the impact and legitimacy of the rushed Section 363 bankruptcies on federal bankruptcy law. Denounce dealer closings, a widely expected consequence of Chapter 11 well-known to dealers. Slam the UAW ‘cuz it scores points in the right-to-work states and in the Republican Caucus.
Join the one-note chorus ridiculing new management at GM and Chrysler for looking a lot like the old management, even if it isn’t the same ol’ management and these aren’t the same ol’ companies — in form, boards of directors, economies of scale or ownership structure.
It’s all a done deal, good or bad. The clear evidence, underscored Monday, is that the Bailout of Detroit has moved from "active" to "finished" on the White House to-do list. Which is not the same thing as having "fixed" Detroit because that is very much an uncertain work in progress.
Put another way: The near-term existential crisis of the past nine months is now a battle for the futures, if any, of GM and Chrysler. Sales are trending up from historic lows, but only barely. Consumer confidence, as measured by the University of Michigan, dipped at last reading after marking encouraging increases. Efforts to woo fresh outside talent to Auburn Hills and GM’s RenCen in Detroit are hampered by the feds’ oversight of exec pay and benefits.
The CEOs of GM and Chrysler, along with the president of the UAW, didn’t show up Monday, congressman, because they have two companies and a cornerstone of American labor to save — and not a lot of time, even money, to get it done.