In an astonishing display of "not getting it", Chrysler has taken out a week of full-page ads in national newspapers to 'thank' America for investing in it via the $4bn it received in the bailout package to car manufacturers. In essence, what they're really saying is "screw you", because rather than spending the money on producing cars that work, are fuel efficient, and that people want to buy, they're frittering it away on full-page ads, shareholder dividends and CEO bonuses. The full-page ads alone cost at least $3.3M. Or put another way, it just cost 66 Chrysler employees their jobs.
I don't understand why the big three are being rewarded with my money for their abject failure. Let them fail. Let them go in to chapter 11 - at least that will force a restructuring. Simply giving them cash isn't going to solve anything. Sure Bush says it's a short-term loan which must be repaid, but you know a substantial amount of that money is going to be spent on very expensive laywers to explain why that money actually shouldn't be repaid.
3 comments:
Seriously, why would they want to make a better car, especially when the government and hence the people are ready to fund them for their failures.
Its like giving a snake some more mice, its not going to change its food habits. Not giving it mice might make it consider alternatives.
(aplolgies to all snake/mice lovers)
Interesting article, but there is one point that I think a lot of people miss about the auto bailout. Even if we let them fail and go into receivership, the federal government will still be out billions. Why? Because the union autoworker pensions are insured by the federal government. Look up the Employee Retirement Income Security Act of 1974 and the following laws modifying it. A significant portion of the bailout money is being used to pay pensions of retired auto workers. If Chrysler and GM were to fail, the taxpayer would end up paying these pensions anyways.
That's true, but I still don't agree with rewarding them for shoddy practices. Look at GM for example. As soon as they had the bailout, GMAC starting offering 0% financing again. That's giving away money, which is no way to run a business. They haven't learned, and they won't learn until they're forced into receivership. Mark my words - come the middle of the year, all the big three will be going cap-in-hand to the government again asking for another bailout because they'll have squandered this first one.
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