The To-Do List From Hell

End a war.  Shore up our failing financial levees.  Slow the foreclosure rate.  Close down Gitmo.  Implement massive public works program on a shoe-string budget.  Run for re-election.  And do it all in the first 18 months.  No problem.

Sure, all of these things are important, and necessary, if you ask the majority of Americans…but I can’t help but think that the biggest test Obama will face come January is What To Do About The Big Three.  I think how he handles this will define his Presidency more than any of the above listed concerns.  The thing is, were he to call me for advice on anything in the first paragraph, I could help him out.  But the question of what to do about Detroit (which is really an inaccurate way of phrasing this, since the entire country and indeed a large part of the world will feel the effects of a bankrupt American auto industry) is even too complicated for me.

Nobody wants to reward bad judgement, and/or corruption, or even undeserved corporate largesse.  Those issues, however, seem the easiest part to fix.  If the Govt “buys in” with the idea that it will instill certain safeguards with respect to wasteful spending and therefore strengthen the odds of eventually turning a profit, or, at least, being repaid at some point, transparency and accountability are at least possible.

Its all very complicated.  I feel compelled to offer a couple of things right upfront.  I don’t buy into the argument that Detroit cannot be competitive due to wage/benefit costs the unions negotiated.  Pensions and health care costs are high, (though, wouldn’t some form of Universal Health Care reduce this burden?) but these costs were not mandated, they were agreed to by both labor and management.  Bean counters on both sides ran the numbers and determined that the contract was sustainable.  I also don’t believe that the only way for them (automakers) to be profitable was to make big, pricey SUVs and trucks.

Clearly, i tend to sift everything through the “how much is enough?” filter, in that I tend to think huge corporations are every bit as craven as bad Governments, and every bit as wasteful.  Do I really need to see 12 or 13 car commercials at every time-out of every football game I watch?  Does my morning paper (what a quaint term, eh?) really need to consist of 4 paragraphs of news and 18 full page ads from car dealers?  How many of the same cars with different names does one company have to build?

From where I sit, “too big to fail means too big.”  We can’t change the past, but isn’t it possible to apply what we’ve learned to the business model and prevent this from happening all over again?  Doesn’t it make more sense to have, say, 15 or 1500 car companies competing instead of 5?  Huge corporations are riddled with fiefdoms, with each fighting the other to insure a larger piece of the budgetary pie.  What could Tesla do with some of the assets bought during a GM liquidation sale?  Could those two youngsters that modified their hybrid do the same for the Volt?

I’m leaning towards a Ma Bell breakup type solution.  Buy in, sell off, streamline and modernize.  Labor instead of lobby.  Or just flat out Nationalize the auto industry and sell cheap, fuel efficient cars at a loss.

Like this one.

More later.



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5 responses to “The To-Do List From Hell

  1. Pingback: Breaking The Corporate Power Structure : Post Politics: Political News and Views in Tennessee

  2. The Missus

    I’m so glad you mentioned Universal health care.
    U.S. auto-makers spend more on health care for employees than they do for steel.

  3. they spend even more on retirees – people who spent 30 there and retired in their early 50s.

  4. democommie

    jim and The Missus:

    True dat. But, it was the “deciders” on the management side who opted to offer the unions health and other benefits ILO higher pay raises back in the day. It’s just coming back to bite them in the ass. I think it’s way too late to save a lot of companies, but I do think that if upper management were serious about turning things around they should agree to work for no more than several times the highest paid hourly wage employees until they can return the companies to profitability. Needless to say, this idea is not one they will embrace.

  5. they spend even more on retirees – people who spent 30 there and retired in their early 50s.

    Bah, these people won’t live forever.

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