I’ve been considering how much money I’d have to lose for my employer through carelessness, recklessness, or poor decision making before I’d find myself out of a job. I’m pretty sure that amount would be in the four-figure range—probably in the lower end of the four-figure range. Maybe including a decimal point.
So the question in my mind is how come the same CEOs who ran their companies into the ground are back on capital hill begging for bailout money. And I’m not just talking about auto execs—I’m talking about the banks and finance companies, too. How can so many rich guys screw up so badly and keep their jobs? It doesn’t make sense.
At least, it doesn’t make sense if you believe that the same rules apply to the rich as to the middle-class and the poor in this country. And, of course, they don’t.
While debate continues on Capitol Hill about bailing out the auto industry, it’s irksome to keep hearing people talk about how the auto companies have made poor decisions. The companies haven’t made poor decisions—the auto executives have.
Whoever put the windshield in my Taurus did a fine job. It hasn’t leaked once. And the conscientious auto workers who fastened down the seat belts and put in the air bags may save my life some day. They haven’t done anything wrong. Nor are the hundreds of thousands of other auto workers, parts manufacturers, and suppliers responsible in any way for the mess in the industry. But they’re the ones in danger of losing their jobs. (And not just their jobs—their careers. If the auto industry folds, where are they going to go to market their special skills? Korea?)
It doesn’t take a rocket scientist to realize that the auto executives have been making irresponsible decisions for decades. Every time gas prices went up, they mumbled about fuel economy and made a few modest gestures toward building more fuel-efficient cars. Fuel prices went down, and suddenly the highways were bumper-to-bumper with gas-guzzling SUVs. Greenhouse gases and the ozone layer be damned—there was money to be made!
Even from an economic standpoint—never mind the environment—it made sense to think ahead to a time when, inevitably, the price of oil would go up again. The least sensitivity to cultural trends should have made it obvious that more and more people in this country are serious about trying to reduce their “carbon footprint.” We’ve been through recessions before: people in charge of marketing the biggest-ticket item in most people’s budget, aside from their homes, should have been able to foresee a time when demand would be down—way down—at least for awhile. And all the innovations those foreign manufacturers were coming up with—did our domestic auto execs think we consumers wouldn’t notice?
So I’m in favor of bailing out all those skilled and dedicated auto workers and the employees of the companies that depend on them. We have to do that. But first, it only makes sense that Congress should tell each of the companies they bail out that the individuals who drove them into a ditch need to hit the road.
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3 comments:
Dear Jane,
As long as you're calling for the heads of auto industry CEOs, how about all the politicians who forced legislation on that industry. These laws helped make car companies unprofitable. And then let's call for the heads of the Auto Workers Union bosses. Having lived in Detroit, I know what terrible contracts were negotiated with this union. No company could have survived this.
So we need to let the auto companies do what they are supposed to do ... make cars ... and get government out of the way and get the union choke-hold out of the picture.
Amazingly, American cars sell very well and at a profit internationally.
The financial companies also had their share of legislation that forced them to lend to unqualified borrowers. (Community Reinvestment Act, Freddy & Fannie - for example)
The ultimate hypocricy is to see the likes of Barney Frank, Chris Dodd, Nancy Pelosi lecturing CEO's when they are just as much to blame. We need to see some heads roll on Capitol Hill.
Now, with the bail out we'll have lots more government meddling ... God help us!
Hi, Idna!
I'm glad to hear from you. I think it's important that we--meaning all of us concerned and informed Americans--keep these conversations going. The issues are too important to talk about them just during election years.
Now, please tell me you're at least beginning to have some doubts about the wisdom of total economic deregulation and a lassez-faire attitude toward aconomics. That's what's gotten us into this horrific international monetary crisis--not the labor unions!
Nobody wants more government regulation than is necessary. But government is a necessary evil--and there are some things that government can do better than private industries--and that includes policing private industries and making them accountable! If the only requirement given to COEs is to make tons of money as quickly as possible, then those who know how are going to do it. The result--as we've seen in recent years, from Enron, to waste and inefficiency by private contractors in Iraq, to the collapse of Wall Street and the auto industry--is a complete meltdown of many of the structures we need to keep society safe and functional.
Idna, your whole philosophy seems to be based on that discredited Republican notion that says that in a completely unregulated capitalist society, those in charge will logically act in a way that will benefit everyone. Well--they don't.
People are people, and what's happened in one segment of the economy after another is that the head honchos make as much money for themselves as possible in the shortest amount of time with no thought whatever to larger issues, such as the long-term security of their employees, the health of the environment, or the prosperity of the next generation.
So with regard to the auto industry, do you think the decision makers should just be allowed to continue with business as usual when they're run their companies out of gas and left them by the side of the road? They were not hapless pawns of a big, mean ol' union. They were fat cats careening around the country in their private jets enjoying the high life. Thanks to their lack of foresight and responsibility, hundreds of thousands of everyday folks may have to face a new year without a job.
Yes, I too believe that we should pay attention to issues ALL the time, not just election years. I haven't been blogging with you lately because I have been in a deep depression since Nov. 4th. I'm still amazed at the insanity of that day .... but let's move on.
OK. Back to the issue at hand. You said: "Now, please tell me you're at least beginning to have some doubts about the wisdom of total economic deregulation and a lassez-faire attitude toward economics." WHAT? Do you actually believe that we have had a "total economic deregulation?" You have used this term before, and I have asked you what deregulation was it that you say has "gotten us into this horrific international monetary crisis." You never answered that question. So I am asking again to please be specific so that I know what you are talking about. And then we can debate the facts and not just thrown around sound bites.
As far as the auto industry. I've been interested in the history of Chrysler in particular, because I used to drive by it's headquarters almost daily as we lived about 2 miles away. My husband also worked across the street from Chrysler. (It was sort of the business around the corner, if you will.)
So when in 1998 the German company Daimler-Benz bought Chrysler, it was a total shock to Detroit. How could a European company now own one of the Big Three?! (You had to be there ... people of Detroit have deep roots and pride in their car companies.) Anyway, did you know that the Germans basically ran Chrysler for almost a decade? Bet you didn't. In 2007, CEO Dieter Zetsche decided to dismantle Chrysler which eventually got sold to Cerberus Capital Management.
You blame the "fat cats careening around the country in their private jets enjoying the high life."The current CEO, Nardelli, has only been on the job since Aug. 2007 when the company was last sold. In no time at all, the UAW threatened to strike and union workers even walked off the job unless this "new" company accepted their demands. I'm sure fat-cat Nardelli was really enjoying this part of his "high life." The man's been on board for one year. Is he to blame for Chrysler's problems? Or are the Germans? It's just too simplistic to play the "blame the evil CEO" game.
You also see no connection between the companies' failure and the unions. I'd like to relate one very telling story. Back in the late 90's, opening up the Detroit Free Press one day, I saw a photo of a bunch of people sitting around a very large room playing cards and shooting the breeze. Upon reading the accompanying story, it became clear that these were GM workers in Flint, MI. GM had to shut down the plant there, but because of the union contract, they could not lay off the workers. GM had to keep part of this idle plant available to the union workers, who got a salary and benefits just for hanging around all day, not working but just being there. GM offered them other jobs in other plants, which they could choose to accept or not! If they chose not to, Chrysler had to keep paying them for doing nothing.
To me this is criminal. The ironic thing is that this "us" and "them" mentality of the labor union is what helps cause the failure of companies that their workers rely on for jobs. I suppose that GM lost a LOT of money in the above scenario. The plant should have been shut down if it wasn't needed any more. So do you blame the CEO for the "waste" because he had to abide by the union contract (which shouldn't have been agreed to in the first place)? This sort of thing goes on all the time sucking the lifeblood out of companies..
Then there's all the regulations put on the auto companies by Congress. And the corporate taxes which are among the highest in the world. But we can get into this later.
For now ... tell me what got deregulated?
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