Hey Detroit–You Want our Help? Our Terms!

This past week there has been a lot of news and commentary about the automotive bailout.  With the exception of the Midwest and an aggressive Democratic caucus, there is minimal interest in bailing out the automotive industry.  Why? They simply do not deserve it.  More importantly, our economy really does not need it. This is a simple case of “management and boards of companies that have shown arrogance since the 1950s that they never needed to change in a fundamental way.”  The auto industry has had 35 years to figure out how to compete against the foreign competition—build fuel efficient vehicles, develop high quality vehicles, manage their payrolls, and re-engineer and retool their operations.  What did they really do? Nothing or, at the very least, not nearly enough.  What makes the automotive industry the exception to the typical business and competitive rules regarding innovation and change in a highly competitive environment?  Their inability to adapt or change cannot and should not justify a free pass when every other US business is expected to figure it out.

Even with their hands out, automotive leadership are dictating their terms and demonstrating their unwillingness to accept accountability for this situation.  This smacks of arrogance.  GM Chairman, Rick Wagoner does not understand “what purpose would be served” by stepping down. UAW Head, Ron Gettlefinger says “the union won’t make anymore concessions.” It is time these parties recognize their responsibility for this situation and agree that massive change is required.  It needs to hurt a lot to receive this bailout.  If taxpayer dollars are involved, everyone should feel the sting.  Besides, if significant change is not associated with this bailout, what have we really learned or accomplished?

Many are arguing that as many as 3 million people may lose their jobs if GM, Ford, and Chrysler fail.  Not true.  The only people who really would suffer in the advent of a collapse are the people who have always stood in the way of real change in Detroit in the first place—Executive Management and Unions.  There are plenty of automotive manufacturers and suppliers with existing US operations ready to expand to pick up the slack if GM, Ford, and Chrysler stop making cars.

Detroit, it is time to accept accountability for your actions.  You want bailout money? It has to be on someone else’s  terms, not yours.  The most directionally appropriate involve, “freezing salaries of auto executives, ensuring taxpayer money isn’t used to pay dividends to shareholders, and ‘very possibly’ a requirement that new management be brought in.”  Anything less, would just not be right.  Wake up Detroit—it is time for a real change!!