Detroit Bailout -- Let ExxonMobil Foot the Bill

Listening to the auto execs this week, hat in hand testifying in front of Congress, you'd think it would have offered a humble moment for them to come clean and own up to their mistakes. But no, they continue to deny any responsibility for the mess they are in. Instead (oh how convenient) they blamed their problems on the current collapse of the economy! That denial alone should exempt them from any "bridge loan."

The best idea I've heard in the last few days comes from an unlikely source, the actor Ashton Kutcher on the Bill Maher show, who repeated the suggestion that the auto industry go meet with the oil industry - their partner in crime - and ask them for a bailout. At least we know ExxonMobil can afford it.

And while we're on the subject, the one piece of good news today is that John Dingell may finally be on his way out as head of the House Energy and Commerce Committee. He had what, like 30 years to get this right? And all he did, over and over again, was enable Detroit to do nothing. It's time to let Henry Waxman assume this important role, particularly since global warming and energy will be the central focus of the committee's upcoming agenda. We can't afford to let Dingell's brand of obstruction stand in the way of real progress any longer.

Comments

[kellygrrrl]

I, too, was impressed with Ashton. Guess I just don't expect wisdom from such a young and pretty thing. He certainly seemed to have a firmer grasp on capitalism and fiscal conservancy than the BushAdmin

[Mixpixlix]

Actaully it would be one more example of Vertical Integration, so popular in the 90s.

However, it's a great take on the situation and gives one room to ponder.

[DouginCT]

I couldn't believe it, but when I heard Kutcher say the same thing, I thought 'damn, that is a good idea', at least at first glance.

[MossyOak]

This is one of those fine ideas that is so absolutely logical it doesn't stand a chance of seeing the light of day.

[lilpeg]

What an excellent idea but, wouldn't that be some sort of monopoly. Probably a business-t­o-business loan to these guys would make it much more difficult for the auto industry to make excuses in the future. But, since the auto makers would want to support their mother industry (oil) ,they may never make the more-fuel-efficient vehicles we need. A green industry should give them the loan, surely some one has a couple-a-blliion lying around.

[melpomene1]

Even the oil industry has to get out of oil someday. (It's not going to last forever.) If they have more foresight than the auto industry, they're working toward greener options now. And they really should pull the auto industry along into the 21st with them. Otherwise, yes, someone else with a couple billion lying around will have to do it. I hope there's a bilionaire or two out there contemplating it now.

[bthechangeyouseek]

This is a scary thought. Although big oil's money sounds tempting, there would never be any incentive to develop alternative fuels. Maybe this could be Bill Gates' new adventure. Surely he has more ideas and the money to embark on them.

[senseability]

Is there only two alternatives??? 25 billion bridge loan or Chapter 11 ? Is that all this world leader of a nation an come up with? Come on, we are smarter than that! I am sure there are many plausible alternatives besides those two that might be far better alternatives. Our legislators can put together a package of anything that they want - they have the power to pass a temporary emergency legislation law bill for automaker assistance.
One senario might be: structure a bridge loan to each automakers need with tight conditions on that loan. Loan conditions being: During the loan and until the loan is fully paid back (1) Senior executive management compensation will be reduced by some percentage. (2) Middle management compensation reduced by some percentage (3) Union workers compensation and benefits reduced by some percenage. (4) An agreed upon independent audit of the company to review operations and make recommendations that would lead to future viablilty of the company- possible cost reductions -reduce auto company model lines, etc.
Also, an assigned tight government company/loan oversight board during the loan period to ensure that the company is following guidlines during the loan period. The oversight board would have the responsibility of making timely reports to congress /american public. Any future assistance would be dependent on progress of the company to become more financially independent.

[bthechangeyouseek]

I think there are more than two ideas as well. Structuring the loans as you mentioned under the current organization requires buy in by the UAW, which they will not give. The only way to restructure and make changes will be through a bankruptcy court. Shedding unprofitable contracts, and taking power away from the unions. I am neither for or against unions, but in this case nothing will move forward until the union agrees a restructured job and benefits are better than no job and benefits.

[isis]

Oh come on. The union people made $25 an hour and the average executive pay was 5 million dollars. Start at the top.

[COPerez]

AND the companies must have a certain percentage of their fleet be "green" (definition?) by a certain, not too distant, date.