The Unbridled Pragmatist
smart enough to know how dumb we are

Detroit Bailout City

The potential of Chrysler closing all 30 plants is undoubtedly sad and will leave many thousands of people in an incredible bind over the coming holiday weeks.  What needs to be pointed out, shouted from the top of Capitol Hill if necessary, is how incredibly transparent this move is in an attempt to force through the Auto Bailout.  What this should confirm is the need for bankruptcy and reorganization for the distressed automakers, Chrysler chief among them.

Chrysler is obviously reeling from the credit crisis and fears of deflation.  Why would a consumer suffer through the frustrating and often fruitless process of securing a loan in current market conditions when the possibility of cheaper prices in the future exist?  What the heads of Detroit aren’t admitting is Chrysler was suffering mightily prior to the fall, dating back to the 70’s, when number crunchers deemed their existing pension and health care plans insolvent for the future.  The guarantees the company made simply would not hold up over time; both the company and management knew it, however, both preferred to go ostrich style.  The current business model simply does not hold up.  Declare bankruptcy and reorganize, a bailout simply delays the inevitable.  Seriously, does anybody even drive a Chrysler?  What is the most popular model?

What is most jarring are rumors from GM that idiot Wagoner wants to close the only ace left up GM’s sleeve: The Chevy Volt.  Word is GM is considering delaying the plant that makes the engine for the Volt, the electric car much of the Detroit future hinges upon.  GM is telling America they refuse to make a product that will both sell and be a standard bearer for ecological vehicles throughout the world unless they get their bailout.  This is the equivalent of the fat kid storming off the playground because he doesn’t get picked on either team, only the fat kid takes the ball with him.  Maybe Wagoner should drop the albatross around GM’s neck, Hummer.  Wagoner personally sought out the Hummer deal despite evidence of rising oil costs and shifts in consumer behavior towards SUVs in the mid-90s.   Wagoner persevered, tying one more brick around GM in rising waters.  Now, instead of shedding excessive costs, Wagoner wants to shut down the only hope of future earning potential with the Volt.  Shortsighted, check.  Ignorant, check.  A blatant attempt to force Congress into a bailout, check.

Get these idiots out of Detroit, while there is still something to salvage.  Bankruptcy, no bailout.


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