Detroit execs should learn when to keep their mouths shut
Add comment December 2nd, 2008
Published Nov. 23:
With their recent sojourns to Washington to plead for money from the government, the Detroit automakers have managed to lose their respective identities.
They have officially become the hottest political potatoes on Capitol Hill.
After days of hysteria, during which the CEOs of the companies offered disastrous testimony to Congress, Democrats not only balked at writing the companies a blank check — a notion they have been desperately promoting for weeks — but abruptly joined their Republican counterparts by demanding some kind of justification from the automakers.
It seems that the CEOs managed to talk for two days and read a combined 30 pages of prepared testimony without ever telling congressional leaders why taxpayers should be responsible for saving the companies they can’t.
Actually, I think they gave the lawmakers too many reasons but not enough real answers.
They tried, of course, nodding like a row of bobblehead dolls when asked whether the investment would be a sound one.
It’s not bad management, the bobbleheads assured lawmakers solemnly. They just can’t get a loan these days.
Of course. That’s why every other American company is going to fail — within minutes! — if they don’t get their hands on some government money, or so their testimony suggested.
They should have stopped talking right then.
Unfortunately, they didn’t.
Ford CEO Alan Mulally acknowledged that the U.S. auto industry has made mistakes “in the past” and went on to argue that “the mix of the housing crisis, credit crunch, wildly fluctuating gas prices and major spikes in commodity prices has led to an unprecedented reversal in the business environment.”
Seems valid, although he failed to note that the “wildly fluctuating gas prices” have dropped to their lowest levels since 2004 without causing a dramatic uptick in sales, which I would expect, based on his argument.
But it was Chrysler CEO Bob Nardelli who came up with the most creative reasons the automakers should get handouts.
“The crippling of the industry would have severe and debilitating ramifications for the industrial base of the United States, would undermine our nation’s ability to respond to military challenges and would threaten our national security,” he told Congress.
To which “industry” is he referring? Halliburton?
He certainly can’t be talking about the domestic auto industry, which hasn’t worked for the Department of Defense for decades, or its suppliers, who have competitors around the globe.
And wrapping the No. 3 U.S. automaker in the U.S. flag under the guise of “national security” is hysterical, irresponsible hyperbole.
General Motors jumped on the same bandwagon last week at gmfactsandfiction.com.
What’s the justification for invoking such a claim? “Buy a Pontiac or the terrorists win”?
