By Hannah B. Hayes:
While Dire Straits sings “Money for Nothing” and the pope admonishes that money is nothing, those of us who work for a living are lucky to have real wealth. At a time when the unemployment rate is 6.5 percent and rising and food banks are stressed to the max, how can these automobile executives dare to show themselves in front of Congress — no matter what mode of transportation they use to get there? With the executive compensation packages that these CEOs receive, how can they ask workers to take wage and benefit cuts?
On the national CEO compensation list, Ford Motor Co.’s Alan R. Mulally ranks No. 153. Now in his second year of employment at Ford, he earns $12 million while the company’s stock was down 13 percent. G. Richard Wagoner Jr. of General Motors has a total compensation package of $14.4 million, and his company’s stock is down 11 percent. Robert Nardelli of Chrysler recently left Home Depot with a $210 million severance package, so he can afford to take a $1 salary. His other compensations are not being disclosed.
According to Bloomberg News, the U.S. government has pledged $8.5 trillion over the past 15 months toward financial rescue without much transparency or oversight. Taxpayers are bailing out Citicorp with $306 billion because banks (they get the capital) can’t sink. Fannie Mae and Freddie Mac received $800 billion to prop up the housing market’s conscienceless lending practices. It’s hard to tally, but it seems the financial system gets the electric bilge pump while automakers are asked to use hand-operated buckets to rid themselves of the bilge water of their failing industry.
The Big Three aren’t in trouble because of financing. They’re suffering from an inferior product. The Model T has got to change. Already-existing improvements that decrease our dependence on anybody’s oil are overdue for implementation. Cars powered by renewable energies should be the focus. Personally, I’m jonesing for the solar rechargeable electric car. Here’s where manufacturers have an opportunity to create real wealth by making essential advancements. Contrast that with virtual wealth — money without backing and debt without collateral.
While CEOs map out tax shelters, veterans look for ways not to lose their homes and 30 million Americans are on food stamps. Research indicates that blame for increasing poverty rides on job losses in manufacturing, agriculture and mining.
Bailouts are risky business, but this might be the first proposed bailout that would actually aid Main Street and drive our country toward a badly needed economic tune-up. It worked in 1979, when government loan guarantees helped Chrysler avoid bankruptcy. That money was eventually paid back, and the company recovered.
Too bad they forgot that business thrives on an innovation stimulus package. Support for new-millennium manufacturing and the resulting creation of jobs would do a lot to counter blind faith in the free market economy and ignorance of the places where government can serve.
By Kelly Weist:
My grandfather worked for Henry Ford. Grandpa actually worked as the boiler man at the Ford plant in Dearborn, Mich., and, as the story goes, Henry Ford would come down to the boiler room in the mornings and Grandpa would share his sandwiches (made with homemade bread by my grandmother). There is actually a picture at the Henry Ford Museum of Ford, Edison and Firestone at the dedication of the museum placing their footprints in cement, and Grandpa is in the background, holding the rag.
I tell you this so that you understand my connections with the American auto industry. I lived in Michigan for the first 22 years of my life. I’ve worked for GM on a PR contract, I have had several family members work in the industry, and the culture of Michigan is permeated with American autos. It pains me to say that maybe it’s time for all this to go away.
Nothing stays the same, and that is certainly a dictate of economics as well as life. No one is guaranteed a job, or rising stock prices, or the ability to sell your product. The problem with the Big Three American auto companies is that they are mandated to make products that they can’t sell. There is no conspiracy between automakers and oil companies to perpetuate our dependence on oil as our primary energy source, but there is currently a conspiracy between the unions, the enviros and Democrats in Congress to kill GM’s, Ford’s and Chrysler’s business.
The main reasons that American autos can’t compete with domestic autos made by non-American companies are threefold. The first is the credit crunch and current economic downturn, which followed on the heels of the spike in gas prices. But Congress had already set up the automakers. CAFÉ standards passed by Congress mandate fuel efficiency that is completely unrealistic. In fact, several studies have shown that any increase in fuel efficiency at this point means that safety engineering has to be sacrificed. The second, and probably biggest, point is the riders to the CAFÉ standards that Congress didn’t advertise. These empower the automakers’ unions to such an extent that it is pretty much impossible for an automaker to build cars that they can sell.
I’m pretty sure that the CEOs of the auto companies have not put this plainly in the future plans that they have submitted to Congress. They can read the writing on the wall (which explains the publicity stunts of hybrid cars and $1 salaries). Congressional Democrats have further environmental and union-backed demands, which will further increase the inability of automakers’ to make cars that they can sell. So any bailout will only continue this agony for everyone.
If the bailout also wiped out CAFÉ standards and union demands, then I would support it. But it doesn’t, and it never will with Democrats and their enviro/union bosses, so perhaps bankruptcy is the only answer.
We were driving on an icy back road when I challenged Donn to make his car skid. With great glee, he sped up and made a sharp turn. I would have sworn he had slammed on the brakes. The car anticipated the slide and made a correction before anything bad happened. Donn drives a Toyota Highlander Hybrid. It’s safe and quiet with super-low emissions.
There’s something even better, although quite pricey, and that’s the American-made Tesla Roadster. It’s 100 percent electric, burns no oil, goes 244 miles per charge and runs for just pennies per mile. It can be adapted for solar recharging and has passed all safety tests. Time magazine named it the No. 2 best invention of 2008, second to the retail DNA test. And, while Tesla Motors is struggling financially, the owners aren’t taking large salaries. They’re committed to putting out a more affordable model soon.
Kelly, you’re dumping workers, trashing American ingenuity, and just plain wrong about safety/efficiency ratios. Detroit can be saved with forward thinking. Bankruptcy (not taking responsibility) and excuses (placing the blame) won’t help.
Central planning types like to think they can order the economy the way they wish. They can force companies through regulation and taxes to produce only the products of which the elites approve, to offer their employees higher wages and luxurious benefit packages, to restrict their production engineering to only use the resources that the elites allow, and to build their plants and stores in unobtrusive locations that don’t infringe on the elites’ beautiful neighborhoods, cityscapes and mountain views. This is far beyond rose-colored glasses; it’s like they’re playing the Sims on Nintendo DS as they walk around every day.
Auto companies exist to create cars. When they are able to do so without excessive regulation and employee demands, they actually do a pretty good job. However, central-planning Democrats are busily continuing their Auto Company Sims game, in which the only product produced is a hybrid subcompact with pre-installed Obama stickers. So, it’s sayonara for the auto companies with or without this bailout. The question is, does our money go with it?
Hannah B. Hayes is a small-business owner and activist with Evergreen Peace. A recent graduate of Leadership Evergreen with a master’s degree in education, Hayes has remained active in this community through her writing and organizing for 35 years.
Attorney and political activist Kelly Weist has served on the board of directors of the Colorado Federation of Republican Women and is the co-founder of Mountain Republican Women. She is an adjunct professor of political science at Metropolitan State College of Denver.