Ha! Would You Buy A Car Designed By OUR Government?

Of course you wouldn't. You're not an idiot. But it appears the U.S. Congress is even dumber than I thought -- although you wouldn't think it possible, considering the bar is already down around my ankles.

As part of a restructuring plan tied to billions of dollars in low-interest federal loans, Democrats in Congress may ask General Motors, Chrysler, and Ford Motor Co. to kick their CEOs to the curb. I wonder who they plan to replace the CEOs with -- Dennis Kucinich?

I don't have a strong opinion about Chrysler CEO Robert Nardelli or GM CEO Rick Wagoner. (If you do, let me know what you think in the Comments thread.)

But I'm certain of this: Ford CEO Alan Mulally fits the profile of the kind of leader the car companies desperately need: he's not a lifelong car guy, he's untainted by old-school Big 3 politics, and he has been successful in another manufacturing industry.

Thanks to Mulally, Ford made a profit in the first quarter of 2008. What's more, Mulally saw the credit crisis coming and fought to get a line of credit for Ford way back in 2006, so the automaker could weather the storm in 2008. That's foresight, and it's the reason Ford doesn't need a government loan to stay in business after the holidays.

You can't blame the Detroit 3 for the rapidly escalating price of gasoline this year, which slowed sales. Blame Bush, Cheney, and America's miserable energy policies.

You can't blame the Detroit 3 for the Wall Street credit crisis, either, which paralyzed sales. But that's not stopping Senate Banking Committee Chairman Christopher J. Dodd (D) from spearheading a drive to can the auto CEOs. Puh-leeze. Isn't Dodd the author of our current financial meltdown? Talk about the pot calling the kettle black.

"Rather than making decisions based on emotion, we should let an oversight board do a deep dive before deciding who should lead the auto industry. Hearsay is a silly way to govern," said leading auto industry expert Dr. David E. Cole to Huffington Post. "Calling for their heads is ridiculous. What do politicians know about running a car company?"

I'm just sayin'.

Follow Diane Tucker on Twitter: www.twitter.com/dianetucker

Comments

[GrainOSand]

I write this as an American citizen who sees his country struggling and who sees that now is a serious time indeed -- for many people.

President-elect Obama has suggested a massive infrastructure renewal/re­vitalizati­on program. There will need to be a conveyance component (planes, trains, and autos) to that plan. We are facing questions whose answers have implications not for the next five years, but for the next fifty, which means the next hundred. Sustainability -- that is the new paradigm. If we were to make it a glossy presentation, it would be, “From Capitalism to Sustainability, the Nation Shrugs.”

Fire the CEO’s? No, all hands on deck in revolution, and old dogs learn new tricks in revolutionary times of transformation. A man once told me that everyone has something to offer, but not everyone knows how to extract the value of everybody. That is the line of demarcation for leaders. Can you inspire the masses to reach higher and to think deeper? Can you as a leader foster a national spirit of innovation and thereby cause a nation to manifest change, timely and beneficial?

There is not enough space for a proposal. America has the brainpower for these problems. What is not clear is whether America has the ability to leave the confines of standard approaches in meeting historical challenges. Science, business, labor, politicos, all hands on deck for a sustained America, made new and stronger by, The People. That gives new meaning to Made in America.

[Diane Tucker - Huffpost Blogger]

I hear ya, especially when you say:

"Does America have the ability to leave the confines of standard approaches in meeting historical challenges?" Stay tuned for my interview with Time Magazine "Hero of the Planet" William McDonough, who anything BUT shrugs when it comes to moving from "capitalism to sustainabi­lity."

Thanks for reading!

[GrainOSand]

Thank you -- all hands on deck.

[Chbronze]

Why would this be a question for anyone other than the board of directors I would think it would be fairly easy for the unions to get congress to eliminate CEO's which presented a problem to them. Why would Chris Dodd single out Wagoner at GM and not Nardelli who has helped in the destruction of each of his last two employers.

[formykidssake]

Bravo Diane,
It's not a coincidence that Ford is not asking for any money. It is proof that, since Mr. Mulally has taken over we have made the tough decisions to turn the company around. As a Ford employee that still has a job, I can tell you that it's not easy to say goodbye to people I have worked with for years, especially competent ones. They didn't get packages. They got a tap on the shoulder and were escorted off company property.
But I do have to agree with some of the comments. Ford must distance itself from GM and Chrysler. The government is not smart enough to know the difference between a company on the road to recovery and one that is still free falling. Some of your readers are, but the majority of the public that watches local news coverage or CNN keep hearing the same thing over and over, "The big three are asking for a bailout."

[tdbach]

Diane, while I agree that there is a bit of a witch hunt going on where it concerns the CEOs of the Big Three (we’re pissed and scared about what’s happening in our economy, and we’re looking to nail a few people for it, and who better than overpaid CEOs?), your headline is sensationalist (i.e., BS). Congress has no intention of running the day-to-day operations of any company. But if they’re going to commit taxpayer dollars (or more accurately, debt) to propping up these companies to a tune that’s greater than their market value, they had BETTER have some say in operations in broad terms. They may not be the ideal body to exercise that right, but they’re all we’ve got. And like banks or investors who rescue enterprises with their cash, we (through congress) are entitled to at least suggesting that the executive committee be purged. The team’s losing big time, maybe it’s time to change managers. Maybe not, too. But it’s not an irrational idea.

By the way, I think it’s time to abandon the label, “Big Three”, when it comes to discussing bailouts and crises. Ford has indeed managed to distinguish itself to the point it deserves to be untouched by that broad brush.

[metalpipe]

Thanks for saving me the time of writing these exact words. Great post.

[Diane Tucker - Huffpost Blogger]

Thanks for reading!

[ErnestineBass]

This has absolutely nothing to do with "bailing out" the Big Three. Any money Congress gives to GM or Chrysler will go to cover GMAC's (jointly owned by GM and Cerberus) losses in the mortgage market.

That's why Mullaly and Bill Ford don't want the money. They don't want Ford Motors tainted by the scandal that will most certainly erupt when the truth about this "bail out" becomes clear six months from now.

http://www.boston.com/business/articles/2008/02/24/cerberus_problems_deepen_amid_chrysler_gmac_woes/

While I'm no fan of Senator Shelby, I seem to recall that he objected to the Wall Street "bailout" as well, and it turns out he was right to do so.

[darthdarcy]

Yes Diane; I would we have many of the world's best engineers they built the moon vehicle 40 years ago that ran with 4 synchronized independent motors one for each wheel, an original groundbreaking Porsche design for moving gigantic guns in and out of their firing positions which our engineers refined with incredible precision.­.and successful­ly..

[judeman9]

Dr. David Cole's comments made me wonder what politicians know about running a country.

The bailout is a loan, not a handout! Right?

[Pdubya]

a loan on what? on money that is fiat. we don't have the money to lend.

[Diane Tucker - Huffpost Blogger]

Yes, it's a low-interest loan.

(But how about Wall Street? Will they be paying the taxpayers back?)

Thanks for reading!

[ScottMonty]

Diane, thanks for taking the time to recognize leaderhip and not lump Ford and Alan in with the other U.S. automakers. We appreciate your confidence in our position; indeed, we're fortunate to be where we are today, thanks to the foresight of Alan when he joined Ford just over 2 years ago.

Thanks to his leadership, we've been able to restructure the company, make processes truly global, and have a shared vision for ONE Ford. It's because of the seismic shifts in the credit, oil and commodity markets that our first quarter of this year was not repeated (Toyota and Honda are also in a similar situation).

We've put together http://thefordstory.com to help the public understand what our plan is and what we've been doing, and to share it with people they know. Thanks again for your efforts here.

Scott Monty
Global Digital Communications
Ford Motor Company

[Pdubya]

agreed.

they do make some good cars/trucks. as a consulting forester and timberland investor, i've driven a 4x4 F250 diesel for 18 years. I like the Toyota too, but the Ford has served me well off-road..­.a very tough truck.

It also runs on grease ;-)

[marknpgh289]

You are absolutely right about Mulally. Bill Ford's smartest move was convincing him to Join Ford. In two years he has earned the trust of the employees, and shareholders by having a plan and implementing it. It would be corporate suicide to lose him now. Getting someone else up to speed would take time Ford doesn't have to spare. Of the 3 Ford is the best bet to come out on top.

[KillTheMessenger]

"You can't blame the Detroit 3 for the rapidly escalating price of gasoline this year, which slowed sales."

Yes, I can. It was the Detroit 3 who spent millions on lobbying against higher efficiency standards. That alone cost the US $500 billion in foreign oil imports this year.

"You can't blame the Detroit 3 for the Wall Street credit crisis, either, which paralyzed sales. "

I don't have to. The problems go way back. You might want to look at GM stock value since 1999. It tells you all you need to know about market "trust" in GM. You might also want to look up what kind of business Cerberus is concerned with (see Mervyn's bankruptcy for one thing).

You are naive. I'm just sayin'.

[imac77]

Government mandates on efficiency won't make people buy efficient cars. The high price of gasoline is why people bought more efficient vehicles in 2008. In a capitalist system (which is what the U.S. is supposed to be) the market drives what sells. If we want to be more socialist (like Europe) and have a high taxes on vehicles that use more gasoline, people will buy more efficient vehicles, and U.S. automakers (which haven't been receiving government subsidies, unlike their foreign competitors from Asia and Europe) can actually make a profit. If the public didn't want trucks, automakers wouldn't make them. Oh, and buy the way Toyota launched a brand new full-size truck last year with high expectations and the worst gas mileage of any full-size 1/2 ton pickup. It was a complete failure, as was Nissan's foray into full-size trucks. Did you know that the state of Alabama gave almost $1billion in subsidies to foreign auto companies in the past ten years?
The credit crisis is all Wall St. and D.C. due to the fake paper and "creative" financing they have been selling for decades.

[bamabound]

That's right - the STATE of Alabama helped create thousands of high-paying (for Alabama) jobs for OUR citizens. If the STATE of Michigan wants to bail out their own auto makers - go for it. If not: hey Ford, GM, and Chrysler - come on down. The skies are blue and the Gulf is, too.

As I recall (because my Dad worked there for many years) Chrysler was a foreign auto company for a time (owned by Daimler - one of Alabama's favorites). Why? It's called a tax situation that was, unbelievably, better in GERMANY - a country much closer to socialist than the US of A. Thankfully, my folks recently escaped from the mecca of Michigan - a state run by a Democrat administration with, apparently, the same skills as GM's management team.

[S1m0n]

Alan Mulally doesn't design cars, he designs companies. But if he were doing a good job of this, he wouldn't be coming to Washington to beg for a handout.

In fact, it's axiomatic: for Ford to be in this position (begging from an invester of last resort), the entire investment community must think that either Mullaly & his board or Ford itself is in a hopeless position. If a few thought otherwise, they'd snap up the conpany and make their killing. No one has done this, so instead Mulally's in Washington.

And given that not firing Ford is the point of this exercise, the government's demand--that new management be hired in exchange for its investment--is not at all unreasonable.

But if you feel otherwise, feel free to send them $25 billion of YOUR money.

[imac77]

Mulally didn't go to D.C. for a handout. Ford is only there because of GM and Chrysler and to show support for the industry. If either GM or Chrysler goes down, the other two will go with it. The Japanese transplants will be in trouble, as well. They all use the same suppliers. Ford doesn't actually want any money. Removing current management is not going to fix the Big 3, and government management is an even worse proposition. What business has the U.S. government ever been successful at operating? I can't think of any. The government and financial experts in NY and DC created this mess, not the Big 3. Maybe we should let the auto industry go the way of other U.S. industries, like steel, textiles, electronics, etc. We can all work at Wal-Mart.

[cruzy]

The Big 3 have been in serious straights for DECADES. Honda, Toyota, etc. all face the same credit crisis and have been dealing with the same gasoline price surges, and yet although they are hurting, they continue to be profitable companies, unlike the Big 3.

For Ms. Tucker to have the gall to suggest that Detroit can't be blamed for any of its mess is both insulting and ludicrous. Detroit can, is and will continue to be blamed for the economic crisis in the auto industry.

As for whether the CEO's should be removed depends entirely on their performance, and it would seem that while perhaps Ford's CEO deserves to stay, Chrysler and GM's CEO's should get canned. In any event, NONE of the CEO's should get paid salary, bonuses, or golden parachutes so long as the companies owe any taxpayer financed loans to the government. They are multi-millionaries who long got generous salaries and huge bonsuses. They will still keep their huge number of stock options which will ony increase in value as a result of any bailout--that is more compensation than any of them deserve.

MOREOVER, if the government is going to extend any assistance to Detroit, then it must come with the strictest of oversight and with iron-clad requirements for the Big 3 to undergo a massive restructuring of their operations to become profitable again. If the Detroit cannot or will not accept such terms, then they should be left to their own fates.

[imac77]

Actually Toyota and Honda are hurting. They are having extended shut-downs in the U.S. and laying off thousands in Japan. Toyota City (home to Toyota's HQ) will fall 90% short of its tax goals next year, mostly because of Toyota. They may not be in as much trouble as the Big 3, but only because they have huge cash piles earned in the U.S. and sent to Japan.
Why is it acceptable for the finance industry (the primary source of the current mess) gets $700 billion with no questions asked, and the auto industry wants to BORROW (borrow being the key word) less than 5% of the gift that Wall St received and it's like pulling teeth.

[MattInVA]

Toyota has NOT been profitable as of late. They lost money in the US in the first two quarters of this financial year (April through September): http://pressroom.toyota.com/Releases/View?id=TYT2008110697423

And this was before the financial markets started crash in earnest.