Autoline on Autoblog with John McElroy
by John McElroy on Nov 25th 2008 at 2:28PM 
Why I Still Support Those Boneheads at the Big Three
What a week it was. Or maybe I should say, I can't believe how weak it was.
The CEOs of the Big Three and the president of the UAW showed up in Washington last Tuesday to plead their case for a bailout. But by Thursday they had managed to turn most the country against them. Even their most ardent supporters were at their wits end.
In short, their testimony was a disaster. They hemmed and hawed. They mumbled and stumbled. They skirted the questions. And even when we did learn some interesting facts and figures, the Senators at the hearing had to pry it out of them with crow bars.
Worse yet, they exhibited zero leadership, no salesmanship, and were completely unpersuasive. No wonder they can't sell cars. These guys couldn't give away free ice cream cones to a kindergarten class.
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
Contrast that to Lee Iacocca's testimony in 1979 when Chrysler needed a bailout. Iacocca would swagger into those hearings looking not like a Captain of Industry, but like the Admiral of an entire armada. He'd take charge by barking orders at his staff, badgering his opponents, and sweet talking his supporters. He convinced everyone he had a plan and knew what he was doing, and did it in a way that connected with the average American. Now there was a salesman!
This time around, the stumblebums at the Big Three got caught up in a vicious news cycle that excoriated them for flying into DC on their plush corporate jets. And when they were asked how they could possibly go begging for billions in taxpayer money while flying around in the lap of luxury, they claimed that corporate policy forced them to travel that way. I just closed my eyes and slowly shook my head.
Why didn't they car-pool and all drive to DC together? That would have sent a message. Especially if they had been in a hybrid.
And the next time will come on December 6th when Michigan's Democratic senators Levin and Stabenow hope to introduce legislation that will free up some of the $25 billion earmarked to help them retool their plants. The idea is to give GM and Chrysler a quick cash infusion until a more comprehensive bridge loan can be negotiated.
But I give that effort a snowball's chance in hell. This is exactly the idea that President Bush first proposed. So Levin and Stabenow have now crossed the aisle to join the Republicans, while their Democratic leaders, House Speaker Nancy Pelosi and Majority Leader Harry Reid, rejected it outright. Why? Because the environmental lobby went ballistic. It's demanding that every penny of that $25 billion be spent on retooling for fuel-efficient cars, not for a cash infusion.
As I've said from the very beginning, the Big Three are not going to get a penny until Barack Obama is sworn in as president. He's on the record saying he will save Detroit's automakers and their UAW workers. And I take him at his word. The only question is, can GM hold on long enough?
This country needs its domestic auto industry for reasons that I've enumerated here already. It's a critical part of our economic engine, and losing it would have dire implications for our national defense.
That's why I still support a bailout, even though the testimony from the Big Three and the UAW is one of the worst performances I've ever seen.
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What a week it was. Or maybe I should say, I can't believe how weak it was.The CEOs of the Big Three and the president of the UAW showed up in Washington last Tuesday to plead their case for a bailout. But by Thursday they had managed to turn most the country against them. Even their most ardent supporters were at their wits end.
In short, their testimony was a disaster. They hemmed and hawed. They mumbled and stumbled. They skirted the questions. And even when we did learn some interesting facts and figures, the Senators at the hearing had to pry it out of them with crow bars.
Worse yet, they exhibited zero leadership, no salesmanship, and were completely unpersuasive. No wonder they can't sell cars. These guys couldn't give away free ice cream cones to a kindergarten class.
John McElroy is host of the TV program "Autoline Detroit" and daily web video "Autoline Daily". Every week he brings his unique insights as an auto industry insider to Autoblog readers.
Contrast that to Lee Iacocca's testimony in 1979 when Chrysler needed a bailout. Iacocca would swagger into those hearings looking not like a Captain of Industry, but like the Admiral of an entire armada. He'd take charge by barking orders at his staff, badgering his opponents, and sweet talking his supporters. He convinced everyone he had a plan and knew what he was doing, and did it in a way that connected with the average American. Now there was a salesman!
This time around, the stumblebums at the Big Three got caught up in a vicious news cycle that excoriated them for flying into DC on their plush corporate jets. And when they were asked how they could possibly go begging for billions in taxpayer money while flying around in the lap of luxury, they claimed that corporate policy forced them to travel that way. I just closed my eyes and slowly shook my head.
Why didn't they car-pool and all drive to DC together? That would have sent a message. Especially if they had been in a hybrid.
They should caravan down together, asking supporters to join them along the way.
Better still, next time they should each take a fuel-cell car, a plug-in, or a two-mode hybrid. They should caravan down together, asking supporters to join them along the way, pulling into Washington with thousands of American-made cars and trucks, pitch pup-tents on the Mall, hold a march, and turn it into a movement.And the next time will come on December 6th when Michigan's Democratic senators Levin and Stabenow hope to introduce legislation that will free up some of the $25 billion earmarked to help them retool their plants. The idea is to give GM and Chrysler a quick cash infusion until a more comprehensive bridge loan can be negotiated.
But I give that effort a snowball's chance in hell. This is exactly the idea that President Bush first proposed. So Levin and Stabenow have now crossed the aisle to join the Republicans, while their Democratic leaders, House Speaker Nancy Pelosi and Majority Leader Harry Reid, rejected it outright. Why? Because the environmental lobby went ballistic. It's demanding that every penny of that $25 billion be spent on retooling for fuel-efficient cars, not for a cash infusion.
As I've said from the very beginning, the Big Three are not going to get a penny until Barack Obama is sworn in as president. He's on the record saying he will save Detroit's automakers and their UAW workers. And I take him at his word. The only question is, can GM hold on long enough?
This country needs its domestic auto industry for reasons that I've enumerated here already. It's a critical part of our economic engine, and losing it would have dire implications for our national defense.
That's why I still support a bailout, even though the testimony from the Big Three and the UAW is one of the worst performances I've ever seen.
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Reader Comments (Page 1 of 3)
Cash 2:35PM (11/25/2008)
I'm pretty sure a critical part of our economic engine doesn't involve spending taxpayer's money on companies that make stupid decisions decade after decade producing products that aren't as good as the competition.
Reply
Sammy 2:42PM (11/25/2008)
Where have you been?
Farm subsidies
Steel tariffs
Banking bailout
State subsidies for every "foreign" maker of cars to put up a plant.
alex 2:51PM (11/25/2008)
This isn't a company; this is an entire industry and manufacturing base that is in jeopardy. You cannot compare it to just another "company" that is getting tax payer money. No different than the world's largest bank, Citi, getting a 25+20 billion dollar cash infusion...
Oh, and they are now producing products that are as good or better than the competition.
JT 3:25PM (11/25/2008)
Where have you been?? Ford is producing some of the highest quality products in their class today! Between GM and Ford they took a pile of top choice awards in safety standards released today!
It’s the ignorant negative attitude toward the big 2.8 that are helping to sink the American economy!
Face it! The United States of America builds a world class car. I am a Canadian and I am proud to say it! Hell I am proud that we have GM, Ford, and Chrysler plants here in my home! Innovative, class leading, safe, efficient…. Need I continue?
Toyota isn’t going to come over and pay social support, so stop toting around these ridiculous opinions that we build inferior products. Sure it was the truth and old opinions die hard, but the general public, the automotive journalists, and the media need to stop this paradigm from continuing.
CTS
Corvette
Silverado
Enclave
Fusion
Edge
MKX
Mustang
Taurus
MKZ
MKS
Malibu
RAM
Sierra
F150
Flex
Focus
Each one of these vehicles offer great quality, price, safety, innovation, and in-class efficiency.
Let’s step up to the plate. Lets drive our cars to Washington….There may be clueless buffoons at the helm, but we can’t afford to let our ship sink.
Thanks again
-JT
AngeloD 3:37PM (11/25/2008)
""I'm pretty sure a critical part of our economic engine doesn't involve spending taxpayer's money on companies that make stupid decisions decade after decade producing products that aren't as good as the competition""
Unfortunately, our American auto makers are competing with countries like Japan and Korea that do exactly that.
If it weren't for closed home markets, and heavy subsidies, companies like Daewoo, Kia, Isuzu, Mitsubishi, Dihatsu, Subaru, Mazda, and even Nissan would have gone under in the past 15 years.
The American auto companies aren't asking the US government for even a small fraction of the help that the governments of Japan and Korea have lavished on their auto sectors.
As Sen. Stabenow pointed out at the hearings, we have been asking our auto companies to compete with entire foreign countries, not foreign car companies.
McLovin 4:12PM (11/25/2008)
@sammy
Just because the government subsidizes other industries doesn't mean it should continue. So far, I haven't seen any credible evidence that the automakers will do anything differently as a result of a $25Billion loan. The government should first make sure they taxpayers' money is safe and then worry about whether GM and Chrysler stay in business. Bankruptcy should be on the table as an option. The automakers can renegotiate their union deals as well as deals with suppliers and hopefully work more efficiently as a result. With a government loan, that won't happen even though it should.
Nellydesign 4:20PM (11/25/2008)
No evidence? On the very day those hearings were held, Ford Motor Company closed its Navigator/Expedition plant in preparation for it being retooled to produce cars. Then they announced their Fusion Hybrid that gets 39 mpg in the city, 6 mpg better than Toyota's Camry Hybrid.
it's easy to miss the evidence when you stubbornly close your eyes...
Randy 1:42PM (11/26/2008)
@AngeloD
And your post is the Best of 2008... "entire countries not entire car companies".
BRAVO! F'n BRAVO
MachinaDC5 2:39PM (11/25/2008)
"Why didn't they car-pool and all drive to DC together? That would have sent a message."
Did you see SNL?
Reply
The Other Bob 2:41PM (11/25/2008)
Does any one of the big three even have a Government Affairs department? Did any one of the CEO's prep a little bit for the hearing? If they have a DC lobbyist, they should be fired.
I am sure Senator's Levin's or Bond's office could have provided an intern who could have prepared these guys for the hearing better than what they did.
I also support the LOANS, but those guys screwed it up.
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Will 4:00PM (11/25/2008)
It seems from the outset these CEOs are just going through the motions until they can declare bankruptcy and start breaking contracts.
Jo Borras 2:41PM (11/25/2008)
John got it 100% exactly right. Those Big 3 CEOs are the least charismatic people I have ever seen on television. Leona Helmsley was more likely to win over hearts and minds.
Save the Big 3, but send these jerk-offs packing.
As for the convoy? FANTASTIC idea! Sign me up (I'll bring my 2009 Malibu Hybrid).
Reply
CEMan 6:53AM (11/26/2008)
Nailed it!!
Help the industry. Send these schmucks packing!
Concered Taxpayer 2:43PM (11/25/2008)
Lets say they don't get a bailout and the big 3 fail and die. what will happen?? millions of people will lose their jobs, right?? possibly.
but think about this
the American auto industry will not go away if the big 3 go away. it would make room for new auto companies to come up and take over. and make cars people actually want and be more efficient in making them. The old way of making cars is dead in America and I say dont bail them out. it just going to delay the inevitable. they are going down and there is nothing a bailout can do to save them.
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alex 2:52PM (11/25/2008)
Yea, because it is just that easy to start an auto company and develop products that not only meet all of the govt. regulations, but are also competitive and desireable.
Mike 2:53PM (11/25/2008)
You should be more concerned that tax dollars go to unemployment than loaning the domestics money to get through the crisis that the financial aholes (who are getting free money- no questions asked) brought us to.
If you think ToyoHondaui is going to replace all of the lost jobs here your out of your fricken mind. They won't replace a quarter of them. We'll get to send all of our automotive dollars overseas instead of the 40$ we are right now. That sounds good for the economy.
Concered Taxpayer 3:12PM (11/25/2008)
I am not saying that honda, toyota or whoever will take them over. and I wasn't saying it would happen overnight. and yes I am pissed about all the bailouts happening since they aren't working anyway, but what I am saying is that the big 3 are over and there is nothing we can do about it. its because they are losing money on each sale of a car!! its because they have to pay 2500 more per car for their employees then honda or toyota. its because they are making cars that nobody wants.
there needs to be a NEW big 3. NEW american auto companies! there are a lot of really good workers out there that could make this work. it will take time, but it needs to be totally restructured from the ground up.
a bailout isn't going to help the big 3.
Mike 3:39PM (11/25/2008)
Maybe you need to pay closer attention.
They lose money only on the smallest of vehicles per unit and the loses were closer to $250 than $2,500. Their current and recent losses are due to overcapacity for producing a product that was popular and then became abandoned overnight (trucks and SUVs) and now for any product as the market shrunk by a third in a couple months.
The losses on small, less expensive vehicles was with the OLD UAW contract that had them responsible for UAW and retiree pensions and benifits and for equal wages whether sweeping floors or machining engine parts. The new contract puts those benifits in the hands of the union with a one time payout by the corporation and allows tiered wages based on job task. It fully puts these companies on a level playing field with other companies doing business in the U.S. Toyota, Honda, etc. included.
Ford showed a profit in Q1 this year, then the gas crunch, followed by the housing crisis, and finally the economic meltdown happened and left all of progress short of where they expected to be. GM was still working on it (albiet they started their turnaround before Ford and are further behind, IMO) and Chysler is still trying to undo the damage done by Diamler.
That doesn't mean the companies are sunk or that they cannot be competetive again, but it does mean they need someone to loan them a couple bucks to get through this mess (note several foreign companies are looking to their own governments for similar loans since the world economy is following the U.S.').
This business is cylical, if these companies were allowed to fail, it would do some serious damage to the economy and I don't forsee any startup companies replacing their value to our economy in tax base or jobs for several decades.
Macgyver 4:23PM (11/25/2008)
But will those companies that come in to replace them be American companies, or will it be another foreign company that sends money abroad? I want the American companies to survive at all costs. Bail them out, fire their leadership and get people who care about cars and quality, not just the next quarters earnings and sound bytes.
redgubbinz 2:47PM (11/25/2008)
I'm with John.
Start with $700 billion for the bankers, then another $800 billion to 'unfreeze the consumer debt market' after they didn't start loaning after the first bailout, why not an extra $25b for the automakers. Why not $50b, $100b?
Tell ya what, here's my wallet, take it all, I'm sure as hell not using it. There's even a Subway card in there, go nuts.
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