Reading Between the Lines

“America is the land of the second chance - and when the gates of the prison open, the path ahead should lead to a better life.”

–President George W. Bush

The debate over whether to rescue Detroit or not is over and now the winners must put up– or end up out of business.

While some Senators of his own party lacked the imagination or perhaps the political stomach to let Congress act on behalf of Detroit– whose manufacturing base one might argue is as worthy if not more so of saving than the so-called masters of the universe on Wall Street– President Bush should be saluted for setting aside his own firm free-market principles just enough to step in and make the funds available that our domestic automakers claim will give them breathing room to get going on restructuring.

It remains to be seen if the incoming Obama Administration or the next and more heavily Democratic Congress will sweeten the pot any, but based on everything the chief executives of the Big Three have stated they can’t even wait that long. What’s more, President Bush’s plan has some pretty tight compliance deadlines attached to it.

But what will the Big Three actually do? Ford says it is in better shape than rivals GM and Chrysler and claims it only wanted the assurance of federal loans that it could tap if ultimately needed. To its credit, Ford did launch its own “Way Forward” restructuring plan almost three years and I suppose they’d be further along that track had not the economy dropped so precipitously this year.

To be sure, we hear Ford has some exciting product in the pipeline. If what’s coming is in the same league as its well received Edge crossover then maybe there will be a successful Ford Motor Co. in our collective future.



The Ford Edge is the kind of consumer vehicle Detroit needs to be offering if it hopes to survive.

That leaves the two sickest men of Detorit– GM and Chrysler. News reports have suggested they are in merger talks. If that comes to pass, what will result will have to be a much smaller, nimbler car and light/medium truck maker. But I think the heavy-truck OEM engineer I spoke with last week hit that nail squarely on the head with this comment: “If you merge two weak companies, aren’t you still going to have a weak company?” Gee, now that is the kind of smart thinking they need in Detroit– not to mention on Wall Street– but I digress.

Joined up or separately, GM and Chrysler no doubt will have to do the painful albeit long overdue paring down of their marques and models if they hope to survive. They also must get whatever cars and light trucks that will grab consumers’ attention, be it for their greenness or their sheer automotive excitement, into the showroom with such lightning speed they may need a time machine to do it.

As for me, I wish all the leaders of the Big Three and the UAW–not to mention all the workers involved– the best of luck and Godspeed in their transformation.

And, yes, I know lots and lots of mistakes were made over many years by both management and labor in Detroit. But guess what? We all make mistakes and in my book we all deserve to try and make up for them and that extends to mega corporations and giant unions. Especially in these United States– a nation that, as our outgoing president once so righty told us, is the land of the second chance.

There is one rule for industrialists and that is: make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.

–Henry Ford

Holding out hope that Obama’s victory and McCain’s gracious concession signaled that maybe just maybe we’d actually experience a month of two of bipartisanship at least on major issues led me to hold my tongue, er, fingers on the real reason that the Detroit rescue plan got shot down in the Senate.

Thankfully, The New York Times op-ed columnist Paul Krugman took the words right out of my mouth and thus has shamed me into stating right here why I think the Grand Old Party’s leaders in the United States Senate quashed the federal loans to the Big Three: Grand old union-busting. Nothing more. Nothing less.

Krugman wasn’t even writing about Detroit (he was remarking on German politics of all things), but still he managed to lay out this gem: “No, I’m not talking about Bob Corker, the Senator from Nissan — I mean Tennessee — and his fellow Republicans, who torpedoed last week’s attempt to buy some time for the U.S. auto industry. (Why was the plan blocked? An e-mail message circulated among Senate Republicans declared that denying the auto industry a loan was an opportunity for Republicans to ‘take their first shot against organized labor.’)”

They said it– not me and not Krugman. But geez, come on. Attack organizer labor? Is it the 1920s or nearly 2009? No wonder their Party is doing about as well nationally as the Big Three’s gas guzzling SUVs.

If you ask me Sens. Corker, McConnell (who in November barely won re-election in his red state by the by) and friends could all stand to use a history lesson on how the wages that rose steadily over decades earned by unionized workers in all sorts of industries was the major factor in creating the rock-solid middle class that until recently served as the backbone of our economy– not to mention, at least in my humble opinion, providing much of the stiffener in our collective moral fiber. too.

Yup, Big Labor got too big for its britches just as Big Business and Big Government did in so many ways. Still, that doesn’t mean what is left of trade unionism in this land of the free needs stamping out by a herd of elephants or any other political force.

I have heard it said many a time that even though the car plants in this country run by foreign-owned firms pay their workers less than Detroit, the reality is they don’t pay them THAT much less. If they did, their workers would be being organized even as I furiously type this. Where on earth did the unions come from in the first place? They rose in response to the horrible treatment and virtually slave wages industrial workers in this country once endured. If you don’t believe me, go look it up in a history book.

UAW workers on “sit-down strike” against GM in 1937

To be sure, don’t listen to Krugman and me. After all something tells me both of us could be plastered with the Pinko label in a heartbeat by right-thinkin’ Americans all over this land of the free that that so many of our fellow citizens– including everyone from card-carrying union men and women to businesspersons of all types– fought and died for in so many wars right up to the two being waged right now.

Nope, nope, why not listen to that darling of the right, yet another op-ed columnist for the Times– the one and only William Kristol?

Here is what he had to say on the whole save Detroit thing the very same day as Krugman:

“Last week, Senate Republicans picked a fight with the U.A.W. on union pay scales — despite the fact that it’s the legacy benefits for retirees, not pay for current workers, that’s really hurting Detroit, and despite the additional fact that, in any case, labor amounts to only about 10% of the cost of a car. But the Republicans were fighting Big Labor! They were standing firm against bailouts! Some of the same conservatives who (correctly, in my view) made the case for $700 billion for Wall Street pitched a fit over $14 billion in loans for the automakers.

“So Senate Republicans chose to threaten to filibuster the House-passed legislation embodying the George Bush-Nancy Pelosi deal,” continued Wild Bill. “The bill would have allowed President Bush to name a car czar, who could have begun to force concessions from all sides. It also would have averted for now a collapse of the auto industry, and shifted difficult decisions to the Obama administration.

“Instead, Bush will now probably have to use the financial rescue funds to save G.M. — instead of being able to draw from sums previously authorized for the green transformation of the auto industry, a fight he had won in the negotiations with Pelosi,” he went on. “And Senate Republicans now run the risk of being portrayed as Marie Antoinettes with Southern accents.”

Thanks, Bill. Now I feel not only extra-vindicated, but not the least bit like a Red for holding my viewpoint! However, I still must wonder whether those GOP warhorses in the Senate still fighting the political wars of years and years ago even paused for a moment to think about who all were those voters who turned so many red states blue with their votes for Obama before they decided to throw GM, Chrysler and maybe also Ford– and all their many workers– under the bus?

Union-busting did not work in the last century and it won’t work now. Moreover, why should it?

He may be a son of a bitch, but he’s our son of a bitch.

–Franklin D. Roosevelt, speaking of Nicaragua’s President Somoza

Detroit’s Big Three automakers have painted themselves into one hell of corner–firstly and monumentally by driving their incredible engines of industrial enterprise right into the ground with massively bad business decisions over the last oh say 40 years and secondly and just as tragically, with their incredibly tone-deaf performance in front of Congress and the American people last month.

Whether or not they travelled to DC and back in private jets or car-pooled in a hybrid was never the issue. What was is that they showed up to ask for a big fat loan from a Congress whose leadership had just had to armtwist reluctant members to fund a Wall Street bailout and the hard-luck trio did so without a plan among them for just what they’d do with the taxpayers’ money. I’d have hooted them out of the hearing room, too.

Now Motown’s three greatest hits– and flops–are back at bat. We can only hope they are grateful for getting a second cut at the ball and above all, that they will make this trip to the plate count by banging one, two, three hits right out of the park.

And if there ever was a moment for public relations to carry the day, this is it. It seems the biggest mistake the Big Three have made in their pitch is not getting across to Congress– and the rest of us for that matter– that what they’re seeking is not a handout or bailout, but a loan.

This was brought home to me today by a staff editorial I read posted on the website of the Motor City’s beloved hometown daily, the Detroit Free Press– a.k.a “The Freep”– entitled if not eloquently but directly as “Hey, America Detroit Needs a Loan.” This is the kind of message Detroit needs to get put in front of Congress and the American people if they hope to get any help– and get it in time.

The editorialist asks all of us to please bear in mind that the Big Three are after a loan– not a handout– that will be paid back with interest: “This is not a gift, a grant or a handout. It’s a loan, the kind of thing financial institutions used to do before they all had to scurry to Washington for their own bailouts, which have been far bigger and subjected to considerably less scrutiny than this loan that the auto industry desperately needs to keep operating — and keep millions of people employed.”

The writer goes on to point out that the last (and first) time a Big Three automaker– Chrysler in 1979– asked the government to float it a loan (for $1.2 billion) it worked out handsomely: “Lee Iacocca’s company repaid the loans early — with a $336-million gain for taxpayers.”



A federal loan worked then, and they can now

Yes, this time around, the loan will be bigger and in triplicate but the stakes are so much higher, too.

Think of the jobs to be lost, the manufacturing capacity to be shuttered, the national pride to be shattered, if we allow one or more of our automakers to go under.

And the key word is “our.” We– I know I ain’t– may not be happy about the pickle Detroit has largely driven itself into, but these troubled firms are major– iconic to boot– American industrial corporations employing tens of thousands of Americans in honest labor that we can all take pride in.

Yeah, yeah, they screwed up. To paraphrase FDR, they may be screw-ups, but they are our screw-ups and if you ask me, we ought to give them the same second chance anyone of us would like to have if we were in dire straights.

I think we owe them– and by extension, ourselves– at least that much.