Detroiter Mitch Albom: "If I had the floor at the auto rescue talks"

[Bozita]

If I had the floor at the auto rescue talks
BY MITCH ALBOM • FREE PRESS COLUMNIST • NOVEMBER 23, 2008


OK. It's a fantasy. But if I had five minutes in front of Congress last week, here's what I would've said:


Good morning. First of all, before you ask, I flew commercial. Northwest Airlines. Had a bag of peanuts for breakfast. Of course, that's Northwest, which just merged with Delta, a merger you, our government, approved -- and one which, inevitably, will lead to big bonuses for their executives and higher costs for us. You seem to be OK with that kind of business.

Which makes me wonder why you're so against our kind of business? The kind we do in Detroit. The kind that gets your fingernails dirty. The kind where people use hammers and drills, not keystrokes. The kind where you get paid for making something, not moving money around a board and skimming a percentage.

You've already given hundreds of billions to banking and finance companies -- and hardly demanded anything. Yet you balk at the very idea of giving $25 billion to the Detroit Three. Heck, you shoveled that exact amount to Citigroup -- $25 billion -- just weeks ago, and that place is about to crumble anyhow.

Does the word "hypocrisy" ring a bell?

Sen. Shelby. Yes. You. From Alabama. You've been awfully vocal. You called the Detroit Three's leaders "failures." You said loans to them would be "wasted money." You said they should go bankrupt and "let the market work."

Why weren't you equally vocal when your state handed out hundreds of millions in tax breaks to Mercedes-Benz, Hyundai, Honda and others to open plants there? Why not "let the market work"? Or is it better for Alabama if the Detroit Three fold so that the foreign companies -- in your state -- can produce more?

Way to think of the nation first, senator.

more...

http://www.freep.com/article/20081123/COL01/811230371/?imw=Y

[rockymountaindem]

1. It's so obvious Shelby doesn't have a leg to stand on

But, like the Black Knight, he'll just keep on taunting us anyway.

[rwheeler31]

2. Spot on.

[BeatleBoot]

3. Senator Shelby is the new Newt Gingrich

Republican dumb fucks always increase donations to the Democratic Party.

[rwheeler31]

4. Shelby has no credibility.

[tomp]

5. shelby may be hypocritical...

...but he's right. capitalism cannot have it both ways. if we have a market economy then the people who profit from it have to take the good with the bad. there is not "get out of jail free" card with a real market.

this is not to say i favor such a market system, but that the players don't change the rules when the game isn't going their way.

there are many ways to address the problems in detroit. handing $25 billion over WITHOUT serious penalties and restructuring is not the first one that comes to mind.

[Triana]

6. handing $25 BILLION over to Citibank, and $700 billion to Wall Street without ...

...oversight, penalties, restrictions, and restructuring IS OK though?

No. That is NOT right.

[tomp]

22. i'm not saying it IS right. nt

[pampango]

7. It seems to me that for the sake of the auto workers, if for no other reason, we need to attach

conditions to a loan/bailout for the industry. To do otherwise would be to miss an opportunity to force auto company management to change the way the industry operates (what cars they build, how/where they build them, etc.). To miss this opportunity and let management continue with "business as usual" would be to allow the decline of the domestic auto industry (and the union) to continue.

[MichiganVote]

11. And of course Americans didn't buy any of the autos they are now bitching about.

Do the auto exec's need change--YES

But you and others who write this crap don't seem to realize you are dumping an entire state---a state that fully supported the Dem. candidates right is the goddamn sewer.

Think!

[pampango]

13. Are you in favor of a $25 billion loan to auto companies' management with no strings attached?

I'm not. At the very least, the government should demand the same concessions (which wasn't much) from the Big 3 that they got from Citibank - government control of executive compensation and dividend payments and government ownership of a block of the companies' stock (hence partial ownership).

I understand that a "no strings attached" $25 billion would keep the auto companies going for a few months and alleviate a lot of short term pain. Such help would do nothing to keep change the way they do business and prevent the ongoing losses to continue indefinitely. At the rate they are losing money the $25 billion would be gone in a few months, then what? Another "no strings attached" $25 billion? How many times?

The conditions attached to the help given Citibank seems to have been negotiated over one weekend. How long should it take to agree to similar conditions for the auto industry? (I know that at the congressional hearings, two of the three CEO's didn't seem to want their compensation reviewed and controlled by anyone new. If they want help, they better be willing to negotiate.)

[Romulox]

15. Give it up. You rant against money for the auto industry, and are silent as to Citi

"The conditions attached to the help given Citibank seems to have been negotiated over one weekend."

Yeah. Name the conditions. :hi:

[pampango]

17. I believe that the government will exercise control over executive compensation

including bonuses, dividend payments are essentially canceled ($0.01 a quarter) for the next three years and the government will become a part owner in Citi through the purchase of company stock.

[Romulox]

18. And I believe in the power of true love. You mentioned "conditions attached", not your hopes

"The conditions attached to the help given Citibank seems to have been negotiated over one weekend."

Got a link?

[pampango]

19. My bad. I have seen this mentioned several times on DU. Didn't realize a link was needed. Here you

go.

http://www.nytimes.com/2008/11/24/business/24citibank.html?bl&ex=1227762000&en=ab700f6adb9c70e5&ei=5087

"As part of a rescue agreement with federal regulators, Citigroup will effectively halt dividend payments for the next three years and will agree to restrictions on and review of certain executive compensation, it was announced on Monday." (Executive pay and dividend parts.)

"In exchange, Citigroup will issue $7 billion of preferred stock to government regulators. In addition, the government is buying $20 billion of preferred stock in Citigroup." (Government stock ownership part.)

"Citigroup executives presented a plan to federal officials on Friday evening after a weeklong plunge in the company’s share price threatened to engulf other big banks. In tense, round-the-clock negotiations that stretched until almost midnight on Sunday," (The one weekend part.)

Always a pleasure to chat with you.

[MichiganVote]

21. Congress already appropriated $25B in a loan form for restructuring.

They have yet to see that money. The 2nd $25B was to keep them afloat to even be around to restructure.

And I have yet to see, read, or be told exactly what the financial has had to cough up for many more billions than a auto sector which has NOT lost entire savings, retirements, pensions and so on.

At least they produce a car, the auto industries. What has the financial district produced except fraud and misery?

[Winterblues]

8. Isn't the Market System about giving loans and collecting interest?

The 25 billion to the auto makers is a loan with interest. what was the 25 billion to Citi bank, or AIG, or Goldman Sachs or Stanley Morgan? We have handed out over a half trillion dollars with zero paperwork or oversight.. Is that how the Free Market System is to work now?

[blue_onyx]

9. There has been restructuring

Come to Michigan and talk to all the hundreds of thousands of people who have had their jobs eliminated. Talk the UAW who have give major concessions. Talk to the retirees who suddenly lost their health care.

[tomp]

23. that's not the restructuring I'm talking about. I'm talking about....

...a complete overhaul of management and direction for automakers or no money. the mangers who got us there are gone without parachutes or no money. there is a viable plan for developing marketable fuel efficient cars or no money. and union wages and working conditions are protected or no money.

[MichiganVote]

10. Are you even aware that the auto industry supports 50% of the jobs in Michigan?

Does it occur to you that roughly 40% of the jobs in America are supported by the auto industry?

WTF are you talking about "penalties" to a frickin' auto industry for? WE ARE the auto industry. The ONLY people you are going to penalize are the very people who put Obama in office.

Get a clue.

[tomreedtoon]

12. We can't just "give" that money out.

Not to Citibank, and not to the auto industry. That's what's troubling people.

We've seen the products Detroit makes. They're sitting on the dealer's lots. Too many dealer's lots, with no real price competition. Too many big, bulky, gas-wasting cars.

Oh, I see a lot of pickup trucks being driven around town. Driven badly, of course; even the idiots driving SUV's are more polite than the guys in pickups racing like crazy to get home for that first beer. The reason those pickups are in great quantity is not that they are needed to move furniture or fertilizer. They're owned because they were priced down to get them off the lot. They're not cars that most people would prefer to get, but they were cheap at the time of purchase.

And the killer is that the union guys are now in bed with the management they despise. Belatedly, they both realize that they all have a stake in what's happened, and that they are both in trouble. But as usual, management wants to do things their way, and they won't take suggestions or ideas from the rank and file. It's kind of like the marriage Palin's daughter had arranged with that sad little teenaged boy. It's necessary for appearance.

Someone from the outside - and I think the only person who can do it is President Obama - will have to set them down, explain the facts of life to both union and management, and force the entire auto industry to start operating in a sane fashion.

(Oddly enough, a guy on Salon's message boards, a right-wing Republican jerk named Elephantman, claims to be a defender of the auto industry against just those reforms. Undoubtedly he's now getting money from auto industry management, as his posts are now pushing a responsibility-free bailout of the Big 3.)

[Romulox]

14. Your response is bizarre given that we have ALREADY given the money to Citi.

It's like a pre-canned rant that you didn't want to waste just because actual events make it bizarre and inappropriate. :hi:

[tomreedtoon]

20. No, I think the Citibank money should be taken back, too.

Although they have supposedly sold the Feds a percentage of Citibank ownership, as I understand, basically nationalizing the company. Would GM or Ford executives allow the Federal government to own a large, or for that matter controlling, interest in their companies?

I don't want Federal money going to building more SUV's and crap vehicles, or for that matter, paying money for sporting events or NASCAR races. (Because NASCAR is not a sport, it had to be mentioned separately.) I want it going to build affordable, ecological cars and paying American workers good salaries. And just throwing a bundle of money at Detroit's bastardly businessmen won't do that.

[TheLastMohican]

16. This country is run by pseudo-financial mafia

and the members of this mafia is in both political parties.

They don't care for an american auto-worker, in fact, any worker who produces something valuable for our economy. All they care is to save their wall street buddies who are using financial resources as a huge casino.

Time for the trade unions to show who is the boss in this country?

[tomp]

24. you got that right! nt