• Dec 5, 2008
Having watched each of the Detroit 3 CEOs take tough questions from the Senate Banking Committee for six hours yesterday, we've returned to the couch today to watch General Motors CEO Rick Wagoner, Ford CEO Alan Mulally, Chrysler CEO Bob Nardelli and Ron Gettelfinger, President of the United Auto Workers union, visit House members of the Financial Services Committee led by Rep. Barney Frank (D-Massachusetts).

We were actually surprised at how well yesterday's hearings went for the Detroit 3. There was far less grand standing by politicians this time around, due largely in part to the lesson learned by each CEO after that whole private jet fiasco. A couple of yesterday's creative solutions for the mess in Motown included a "pre-packaged bankruptcy" in which financing for restructuring would be secured beforehand, as well as a renewed interest in seeing GM and Chrysler follow through on their erstwhile attempt to merge a few months ago. Since Ford's position is more secure than that of GM and Chrysler, Alan Mulally looked bored most of the day, while his colleague Bob Nardelli got the grilling of a lifetime. Senators seemed particularly interested in why Chrysler's owner, the private equity firm Cerberus, couldn't just infuse the Auburn Hills-based automaker with more money.

While senators yesterday seemed to take the situation much more seriously this time around, we've just finished watching opening statements made by members of the House of Representatives in the Financial Services Committee and were less than impressed. It appears the soap boxes are out and spot lights are on.

[Photo by Chip Somodevilla/Getty]


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  • 34 Comments
      • 6 Years Ago
      that piece of cr@p senator shelby was on the news this morning.He said supporting failed bussiness models was a waist of taxpayer money. He might have a point. When asked why citi bank could get billions upon billions that crook wouldn't answer, just glossed over it. 8 trillion dollars to the banks. Just how much is that. I'm not sure you could even count that high. America is being robbed blind by these people, and its not just republicans. It's a predator class that is pulling off the big one with this move-good luck america cuz you been burned.
        • 6 Years Ago
        Check you facts he has voted against and was vocal against all of the bailouts so far...

        He is one of the only ones that seems to think about acting responsible with money that my great-great gand children will still be re-paying.

        • 6 Years Ago
        sorry you are right. Not a big fan of southern politicians so my bias got the best of me. Substitute that freak crook barney frank and we got a real winner
        • 6 Years Ago
        Senator Shelby is one in particular who has great interest in the failure of Detroit since he secured a "pre bailout" for Hyundai, Mercedes Benz and Toyota in the form of tax breaks and land gifts for companies whose socialized health care and pension systems already gave the competitive advantage.
      • 6 Years Ago

      Geese. This country is really in the sh__er.

      I wonder how much longer we'll keep padding the pockets of paper pushing big shot lying bankers at the expense of hard working employees. I mean, really, what kind of crap is all this? I'm not a big fan of the big 3 generally, but what the heck are we supposed to do - flush the biggest-spider-webbed manufacturing infrastructure down the sh__er?

      This reminds of a book written by the mad genius, Buckminster Fuller - GRUNCH of Giants (gross universal cash heist) - where the few powerful global money men control the money and direct our lives. Is this where we are right now or going to? If the big 3 were 'in' with the right people, or offered the proper 'exchanges' they would be given the money in a second. It's madness.
      • 6 Years Ago
      Why does the media keep bringing up the private jets? Do banks not use them as well?

      How many people heard of this:

      http://consumerist.com/5060290/after-the-bailout-aig-bought-themselves-a-440000-retreat-at-a-california-resort
        • 6 Years Ago
        See people dont want to talk about the bank bailouts because then they would have to admit how stupid they were for signing those mortgages. We all know its always someone elses fault and its easier to attack the CEOs of the big 3.

        The fact of the matter is that americans brought all this crap on themselves. They signed for the high intrest rate and they bought the 9mpg SUVs. No one wanted to act responsibly and now were taking it out on the corporations and claiming ignorance on our part.

        It all makes me sick.
        • 6 Years Ago
        Private Jets:

        Last time I checked President George W. Bush has two of them and he costs the tax payers 20 Billion............ A month in Iraq!

        Just saying..... Kind silly to be bitching about planes! :)
        • 6 Years Ago
        Gary.... because it's a non-issue that we (general term there to include the media and the National Enquirer-loving general public) love to focus on! :-)

        Personally, I'd rather that the executives get there and back quickly, so they can get back to business.

        I'd like to ask them in front of Congress "Do you think you could have been more productive with your time instead of being behind the wheel for 20 hours?"


      • 6 Years Ago
      If Chrysler wanted to be a viable manufacturer, why did they hire Nardelli? I guess his track record at Home Depot impressed the board.
        • 6 Years Ago
        actually, hiring an engineer is usually a bad idea. hiring an accountant/finance guy is the absolute worst.

        what these companies need to succeed is a AUTOMOTIVE ENTHUSIAST at the helm. Ive worked with these people before, and ive noticed most of these guys arent even motorheads. they got their job because their MBA said they were suitable for the position... and LOTS of them also got the job because their dad was at the company during the golden years... thats why their products went to crap. and i said this at an earlier article a month back or so, but if a guy looking like bob lutz is your creative genius... you have problems. you should never judge a book by its cover, but if youre trying to design something attractive/sexy for the masses, you dont hire a guy who looks like every other overweight white guy in detroit. you hire someone with ambition and is from a cultural hub.... someone that is "with the time."

        assuming Lutz even had an ipod and knew how to work it, i bet his playlist would be filled with artists that are no longer breathing... and this guy is the one trying to design the american car FOR TODAY.

        that being said, "trendy" is only good for now (a la new beetle). "conservative" lasts the test of time (but doesnt really attract anyone; its just a safe bet a la anything toyota) ... what needs to be done is find the balance between those 2 words, and you have yourself a huge hit that can be seen as great the next few decades.
        • 6 Years Ago
        Could be worse. They could have Rick Wagoner. GM needs a CEO who once worked as an Engineer. Hell, give Bob Lutz the job.
      • 6 Years Ago
      Incompetent CEO's making a case to incompetent Government leaders. What a scenario? If they had spent a week each year, for the last 10 years, getting to know their customers and dealers. This could have been avoided. They are out of touch with the market.
      • 6 Years Ago
      "...as well as a renewed interest in seeing GM and Chrysler follow through on their erstwhile attempt to merge a few months ago."

      Which is still a stupid idea. It could do a few good things--maybe put the four from the Colorado into the Dakota for better fuel economy, as an example, and get rid of the Colorado entirely--but that's only if it were handled right, which it won't. (And besides that, changing engines in vehicles and all of that sort of thing is impractical anyway.) As it will be handled, it'll only make ten brands (is that correct?!) all run as a single corporate entity, all needing specialized vehicles...

      Nevermind. For me? I'm hoping prepackaged bankruptcy so they can end the dealerships and cut down the dead wood at GM--y'know, faulty management. I'm hoping that the working guys down on the floor don't get slaughtered. And I'm hoping that whatever happens, we won't have to go through this mess again.
        • 6 Years Ago
        You know, I would heavily oppose a merger of these two companies, but who cares about my opinion. Taxpayers opinions don't matter do they? it doesn't make much sense does it? That's like having a crack addict go to rehab and the director of the rehab center is the crack dealer. In otherwords, it isn't going to do much good to anyone.
      • 6 Years Ago
      I have said it once and I will say it again. Even though I dislike the fact they are getting this grilling and the banks got a blank check pretty much handed to them, I think in a way maybe they learned their lessons.(the politicians that is). The whole financial bailout has been a fiasco and maybe, just maybe, they want to do this right. Call me crazy, but I like to call myself an optimist.
        • 6 Years Ago
        I agree with you. I'm optimistic too in that this is all just a show to fool the public into thinking Congress is responsible in who they hand out money to divert attention from the fiasco that allowed banks like AIG to misuse the funds they got and that they will approve the loans to try to make us believe they used this kind of due diligence all along.
      • 6 Years Ago
      It seems to be a study of who is the biggest hypocrite.
      • 6 Years Ago
      Wouldn't it be great to hear the politicians ask how they can help, and I don't mean by just approving loans, but by the way of policy decisions, regulations, or the lack-there-of, and the like, instead of trying to get the best sound bite to be played on the nightly news?

      Oh well, will never happen, that's just politics.
        • 6 Years Ago
        Yes

        And let me add "tariffs" on imports! What-what what? ;)

        Let me explain!

        United States Automobile manufacturers are at a massive disadvantage to imports. Here's why!

        Collectively, Toyota, Honda and Nissan have sold over 5,000,000 cars in the USA in 2007. Collectively Ford, GM and Chrysler have sold 0 (that's zero) cars in Japan. This is due to a governmental ban on selling US Automotive products in Japan!

        Add to that disadvantage the fact that South Korea sells 200K cars in the US and the US can only sell (i think) 20,000 in South Korea, you'll again see a disadvantage to US auto makers!

        Now comes the FOOD. We export food to South Korea so our policy makers say that because we sell so much food to SK we wont sell cars in volume and it will balance out!

        The facts are that heavily subsidizing one industry (FOOD) and making another industry (US AUTO MAKERS) pay for it is NOT free market. It's 100% bad policy making.

        So it is my belief that the US Government has caused massive damage to the US Auto industry by

        A: Allowing an unregulated amount of imports.
        B: Allowing the restrictions / bans on US Automotive products from other countries while giving other countries products free market scenarios.
        C: Subsidizing exports of grains, corn and wheat by way of costing US Auto Makers billions of dollars in sales.
        D: Causing US Auto Makers to cut corners (in the 80s) to match prices of imports.
        E: Causing US Auto Makers to lack in quality (due to D above) because of cutting corners
        F: Causing US Auto Makers to lose market share (because of A, B, C, D, E)

        Additionally, monies earned by importers have not truly been earned. Here's why!

        Let's say you have a lemonade stand! Your neighbor has one too! Your neighbor can sell lemonade to the US, Japan and the rest of the world. You can't! Then your parents come along and say "Well son, your brother sells wheat so we're going to stop you from selling your Lemonade in South Korea so he can sell his wheat"

        You argue is that you employ directly and indirectly 3 million people and the your Wheat growing brother about 1000. Dad says "Nope, this is the way it's gotta be" and I don't care about your 3 million people.

        Then you point out that you've got to cut corners on your product because of your parents decision.... See where's it going?

        The facts are that everything I said is a fact! It's all verifiable! It's our Government that F-ed up the entire industry and it started with allowing imports that didn't have matching exports IN THE SAME INDUSTRY!

        Solution: Tarrifs on all imports that equalize the playing field both on cost of manufacturing and cost of not being able to sell our damn lemonade in their country! That and only that would be a fair playing field... Unless of course all the wheat growers want to kick in the difference! I doubt that is ever going to happen so why not regulate industries based on industries and not economies! It's the only fair solution to having a fair playing field!

        How is anything earned if it's handed to your competition on a silver platter! HANDED DAMN IT!


        LEMONADE 5 CENTS
        Randy
        • 6 Years Ago
        I'm trying to think of regulations that they can think of to help them, but well what helps them could potentially hurt them. With the competition running a bunch of factories here it would be unfair if they didn't get the same benefits the big 3 did. If they start taxing imported parts that would be a problem too because the big 3 doesn't produce every thing over here either.

        No politicians are useless when it comes to this, because if the CEOs of the big 3 can't fix it, sure as hell politicians wouldn't know what to do either.
        • 6 Years Ago
        Yes.
        • 6 Years Ago
        Yep, and if it weren't for the grandstanding, this could be done in one day instead of two.
        • 6 Years Ago
        They can fix the labor costs at home by eliminating "right-to-work". That combined with the FLSA should help unionize the transplant factories. Hyundai employees would see their pay + benefits almost triple. Now anything built here is built on one flat labor rate. Next, we tariff/tax imports not made here so that the profit margins are equivalent or less than if they did. That gives them two choices, accept lower margins and build elsewhere, or open a factory and build here. Either way its a win for the USA. We can also demand that a certain percentage of their engineering is done here if they want to sell here, else we apply a tax for that.
      • 6 Years Ago

      So finally will they be getting the money or not?
      • 6 Years Ago
      " . . . Bob Nardelli got the grilling of a lifetime. Senators seemed particularly interested in why Chrysler's owner, the private equity firm Cerberus, couldn't just infuse the Auburn Hills-based automaker with more money."

      I agree. Good come back on Nardelli's part though. I didn't know that Cerberus pumped in another $2 billion this summer.

      Any deal with Chrysler should also include a stipulation that Congress will match whatever funds Cerberus injects into the company. That ought to jolt them mad dogs from Hades awake.

      I am all for the GM-Chrysler merger, and any bailout money should be intended to facilitate that goal.

      I also submit that Chrysler is the easiest of the Big 3 to turn around. It's smaller and therefore can rebound quickly. However, it must be snatched away from Cerberus' grip...and that includes Chrysler Financial! Without a credit line to offer, Chrysler is doomed.

      Similarily GM without GMAC has been a disaster. GM should swap ResCap for GMAC auto loans. I am sure a deal could be worked out this way.

      Secondly, I believe Chrysler should forge a stronger deal with the Renault-Nissan alliance to keep Chrysler afloat and independent. Don't count this venue out just yet. I rather prefer it over the GM-Chrysler merger because it enhances competition moreso.
      • 6 Years Ago
      Also: Am I the only guy here that thinks that Rick Wagoner looks like Bill Maher in that picture?
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