Inevitably Inevitable
Some things in life are inevitable. It’s not that these things might happen, or even that they are really likely to happen. There are simply things in life that will happen, period, end of story. I don’t like them. Hell, I may even hate them and I may not want to accept them. But my refusal of acceptance or my complete detestation doesn’t change them one little bit.
They say, whoever the hell “they” are, that the only things in life that are inevitable are death and taxes. I disagree. There are a few more. For instance:
· If you jump into the water you’re going to get wet.
· If I gain another 6 pounds I will actually begin to create my own gravitational pull.
· If you run a business with lousy service and a lousy business plan you’re going to go broke.
· If you work for a really lousy business and you continually make unrealistic demands that price your services out of competition with the world market and still consider yourself to be irreplaceable you will lose your job.
Such is the case with the Big Three Automakers and the United Autoworkers Union. The Detroit disasters and the union that controls them were seated before the Democrat controlled House Financial Services Committee chaired by the inane economist Barney Frank. It seems only fitting that Congressman Frank would chair this meeting as he was the one who, as both chairman and minority leader, started this whole mess with the infection of the credit markets through the viral carrier Fannie May and Freddie Mac.
I have recently owned Chrysler, Ford and GM products and could give you a litany of customer disservice stories and product performance nightmares of several crapmobiles, but I believe I could not give a better example of complete business ineptness than was exemplified by the comments of GM CEO Rick Wagoner and others to this august committee.
As the auto industry giants and union autocrats sat before the committee, lips pursed to suckle once again off the government teat, committee member Paul Kanjorski from Pennsylvania asked how much money would be needed just to keep GM’s nose above water until March 30, 2009. In a keen display of his in depth business acumen Mr. Wagoner said “Huh, I dunno”. When asked when their current supply of cash would run out, neither Wagoner or Chrysler CEO Robert Nardelli could answer with anything more definitive than to say it would be by the end of this year or sometime early next year. How could you come before this committee claiming your very survival was dependent on the outcome and be completely unprepared to answer these two very basic questions?
Is it possible that these guys did not want to get pinned down to a number or a date, or are they really that dim? To sit before Congress and ask for “a loan” to supposedly save your ass from bankruptcy and not know how much money it will take or when the drop dead date is that you need it is almost beyond comprehension. Perhaps this is why these guys are before Congress and not the First National Bank – Bank President:“Yes Mr. Wagoner, we would be interested in discussing a loan with you. How much would you like?” Rick Wagoner: “Huh, how much you got?”
It’s no wonder that the UAW has been able to fleece these guys at a game of 3 Card Monty every four years or so. And as for the union, with everything that was being said about the immediacy of the situation, the possibility of the businesses failing or being forced into bankruptcy, when asked if the union would consider renegotiations of their contracts union chief Ron Gettelfinger said “The UAW can’t be the low hanging fruit. While we’re at the table, we’re asking that others come in and sacrifice as well”. Hey Ron, guess what!! The fruit is usually hanging pretty low on a dead freaking tree.
How can anybody take this whole scenario seriously? I keep waiting for Allen Funt to come out from behind a curtain and say “Smile, you’re on Candid Camera”. On one side of the table you’ve got Barney Frank, the chief architect of the credit disaster, as chairman. Plus you have questions and comments by committee member Maxine Waters who defended actions of the rioters and looters who caused tens of millions of dollars in damage during the 1992 LA riots as acceptable, describing them as baby mama’s who used the opportunity to take some milk, bread and shoes. She also told oil company executives that she was going to fight for socialism and get their oil refineries taken over by the government.
On the other side you’ve got the CEO’s who flew to Washington in their private jets to ask for money, but they don’t know how much or when they need it. And a UAW chief who doesn’t think his dues payers should have to sacrifice unless the companies which are going out of business sacrifice as well. In the immortal words of Lloyd Bridges “Bad week to quit sniffing glue”.
The numbers being bantered about regarding the possible failure of these companies are also pretty questionable. I received an e mail from GM outlining some of the basics on why I should support government intervention. It also included a web site set up by GM to further explain their position. It would have been nice had they been this corporately proactive with their new car customer service. I salute them for the money they spent creating this public relations campaign so they can get money. For a company that doesn’t have the math skills to identify what it will cost the taxpayers to save them from the grave they are pretty well informed as to what it would cost the taxpayers if we don’t. GM explains that 1 in 10 jobs in America depend in US automakers. Nearly 3 million jobs are at risk. US personal income would be reduced by $150 billion. Tax revenue lost in the first 3 years would be $156 billion. While these are pretty ominous numbers they are partially misleading and only accurate if a number of very unlikely things happen.
The 1 in 10 number may be true but it paints dependence with a fairly broad brush. Dealers, mechanics, parts suppliers, steel makers, tire manufacturers, etc. can continue to conduct business with automakers outside of Detroit. Personal income would only be reduced by $150 billion if the people that are affected do not get other jobs. And the $156 billion loss of tax revenue is actually all inclusive of state local and federal taxes and fees and increased unemployment and health care costs. This is only true if these employees stay unemployed and nobody buys a non-Detroit car.
Today’s was truly an historic meeting. At no time in the history of mankind has more stupidity been in one place at the same time outside of a Keanu Reeves birthday bash. I can only imagine that the vortex of idiocy was so strong that just passing by the meeting room in the hallway could leave you unable to define what is is.
It is inevitable that businesses like this, run by people that are so completely clueless, with a work force that elects and supports union leaders that are so totally out of touch with reality, must fail. I don’t like it. While I have no personal stake in it I can say I hate it. As a proud capitalist I don’t want to believe that these former all-star companies have sunk this low. But none of that matters. As surely as I will soon have moons circling me in an elliptical orbit, business run this poorly have no choice but to die. The problem is when you’re this dumb somebody may need to tell them to lay down.
As I asked before, how could you come before this committee claiming your very survival was dependent on their decision and be completely unprepared to answer a question as to how much you need and how quickly? Beyond reluctance or brainlessness there is a third possibility. Could it be that the only people who thought this was a real hearing were the spectators? Could this hearing have been for entertainment value only with the outcome already guaranteed? Was this staged like a professional wrestling match where the good guy Prince Congressman roars with indignant anger giving the crowd something to cheer about before the bad guy Automan comes up with some last minute stunt to win the championship? Did the UAW deliver the goods on November 4th and have some further mail to carry for the next mid-term elections?
Maybe I’m the one that’s slower than a 74’ Chevy Vega with the air conditioner turned on.
