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Dave Winer

Dave Winer

Posted: November 20, 2008 11:12 AM

What to do with Detroit?


Reading the news it's not clear if we're going to give Detroit the money to keep them going for a while longer. Pretty sure we can't afford not to, and of course they'll be coming back for more next year, and that's probably a good thing, cause it's time to make some changes. We need to own them for a while so they start working for us -- not continuing to feed our oil habit and keeping their buddies at Exxon-Mobil's profits high.

And they have to retire their fleet of corporate jets. And all their execs take pay cuts down to less than $1 million per year. If they choose to quit, so be it and good riddance. And since we're going to own them, a new rule -- no more commuting from Seattle to work in Detroit for the CEOs. We're bailing them out not because we think they've done anything remotely like a good job, we're doing it so that we don't have to feed and house their remaining employees and bail out their suppliers when they go bankrupt. We're doing it to save our country, not to save the auto industry as its currently configured, which is rotten and dangerously short-sighted.

I just got a briefing from Frontline, a show that aired just before the election called Heat, about global warming. Lots of interesting stuff in there, all of which must be taken, of course, with a grain of salt. But if you believe them, Detroit had a Prius before Toyota, funded by the government, but it never went into production. The Prius was a response by Toyota to a US initiative to increase gas mileage. Detroit took our money but never shipped the damn car. Now they're rebooting their effort to produce a hybrid, and get this -- they're starting from scratch. The bastards threw away the R&D we paid for. So much for trusting them with our money. Can't do it.

A picture named house.jpgBut we also can't jump off the cliff. We'll have Hoovervilles in every shopping mall. When you go to the supermarket the shelves will be empty. It's already happening at some local retailers. When the economy fails, distributors go out of business, then the manufacturers the distributors stiffed, and all of a sudden even if you have money in the bank you can't find food to buy. You turn up the thermostat and there's no heat. Old people and children and people with chronic diseases die when we get there. Perhaps you have some people like that in your family. Perhaps you're one of those people?

If you've ever been to the Third World, or parts of the US that are the Third World like the South Bronx and New Orleans and (I'm told) parts of Detroit -- you owe it to yourself to find out what that's like. Because if you're stupid enough to think that letting Detroit fall off the cliff somehow won't take you and your family with it, you need to get educated, fast.

I'd start with watching the Frontline episode about global warming and see if that doesn't get you thinking. Then, after we give them the $25 billion, when they come back in (say) February, we'll be ready with a plan for them to execute. And they won't be coming to Washington on their corporate jets next time. We need to cut our oil consumption, fast, and they need to cut the fat.

Some people say they should go into bankruptcy, and I'd be willing to make that a condition for the companies to receive government loans. If they can get by without the loan, fantastic. If they can get a bank to give them a loan without going bankrupt, even better. I might also add the requirement that while the companies are receiving our money, their CEOs take the pay cuts outlined above. You don't like it? Quit. We'll keep taking resignations until one of your execs is willing to roll up his or her sleeves for the cause. Taking government money should be a painful process. They've gotten accustomed to our bailouts and keeping their corporate jets -- it must be factored in their planning that we're soft touches. That's got to stop.