Now the election is over, we can look back at the mess in the economy. I see the latest members of the queue at the federal trough are the auto manufacturers. Bail us out, they cry; we're too big to fail. What's bad for GM will be really bad for the country. Give us money or we'll make a big mess when we fail.
But I have to ask: why is GM in this shape? Why are Ford and Chrysler in such straits? And the answer that comes to my mind is, because for thirty years they've all been making stupid, short-sighted marketing decisions. They've been going for the quick, easy buck, selling oversized SUVs getting nothing to the gallon. Their vehicles are junk, too; they routinely score below average on the Consumer Reports reliability scale. It's true that Ford has recently produced a couple of vehicles that score better; but I haven't seen a sign of it from GM.
Worse, they've actively fought attempts to require them to make more efficient (i.e. higher gas mileage) products. The reason it's taken 25 years to get the CAFE standards raised is because of the money the auto industry has poured into lobbying against it.
So Congress says, show us a plan and we'll consider a bailout. Now, this is uncharacteristically business-like for Congress; but I don't think it's unreasonable. There isn't a lender in the world (especially now!) who would hand out money without some idea of what the borrower planned to do with it, and how they expected to pay it back. And the auto CEOs have slunk back to Detroit.
I'll be very interested to see whether they present a plan as requested. I don't think they will, because I don't think they have a plan. I'm not the only one, either - I heard John Boehner, the House minority leader, was quoted on NPR the other day saying he'd been talking to the auto execs, and he didn't think they had a plan. It's very unusual for me to be in agreement with John Boehner.
Does this remind you of Henry Paulson and the $700 billion? Give us a lot of money and we'll fix things. They're tottering on the edge of oblivion and they can't be bothered to convene a strike team to decide what they would do with bailout money if they got it! We'll see what they present to Congress next week, but by God, if they don't have a business plan - three business plans, one each - they shouldn't get any money.