GM’s road will include its share of bumps
Everybody thinks they drive well.
The ninnies who do not use turn signals. The interstate bumper-mates who measure car lengths in inches. The parallel parkers who use the concussion method.
Ask anyone, ask everyone, and they will tell you they merge into life’s great traffic flows without so much as a downshift.
And so it is with international efforts to save General Motors and Chrysler.
In the United States, President Barack Obama thinks he can steer GM through bankruptcy. The Chinese government, caught unawares by Sichuan Tengzhong Heavy Industrial Machinery Co. intentions to buy Hummer, may raise a red flag. And the German government has become referee and financier in negotiations that will allow a Canadian auto parts supplier to take over GM European subsidiary Opel with the help of a bank owned by the Russian government.
Got all that?
But for complicated, try asking for directions when your new owners work on Pennsylvania Avenue.
GM filed bankruptcy Monday after weeks of White House jaw-boning and jaw-breaking. Company bondholders will be drinking their martinis through straws for a while.
Wednesday, senators heard wrenching testimony from some of the 2,000 GM and Chrysler dealers – none, thankfully, from Spokane – whose longtime loyalty earned them pink slips. They employ hundreds, many in small towns that already have more than enough economic toast on their plates.
The marketplace, not the government, should be sorting winners and losers, they said.
Senators, Democrat and Republican, expressed astonishment.
“I don’t believe that companies should be allowed to take taxpayer funds for a bailout and then leave local dealers and their customers to fend for themselves with no real notice and no real help,” said West Virginia Sen. John D. Rockefeller IV. “It’s just plain wrong.”
“What rhyme or reason is there to this?” Florida Sen. Mel Martinez asked of unfortunate GM Chief Executive Officer Fritz Henderson, who was left with the keys when predecessor Rick Wagoner was ousted.
Everybody, Henderson replied, must sacrifice.
Well, almost everybody. The Wall Street Journal reports that House Committee on Financial Services Chairman Barney Frank suggested to Henderson last week that a GM warehouse in his district with 90 employees not be closed as part of the reorganization. And so it won’t.
Not everyone in Congress has Frank’s backseat pull. But that will not stop many from reaching for the steering wheel.
It’s going to be a bumpy ride.
Bless Lee Iacocca, but we all might be better off had he not been so successful getting a crippled Chrysler back on the road in the early 1980s. He not only repaid a $1.2 billion federal loan seven years early, the government earned a $311 million profit on stock warrants that were part of the deal. Such is the promise behind many a bailout today.
Iacocca, incidentally, will be among the losers in the Chrysler bankruptcy. His pension, including the right to a Chrysler vehicle for life, is considered unsecured claims bankruptcy will wipe off the books.
No good deed goes unpunished.