Tuesday, November 11, 2008

There are two kind of companies in America...

There is a great editorial in the Wall Street Journal on how the hated Big Three automakers, creators of evil, gas guzzling, greenhouse gas spewing SUVs, THE symbol of the horrible environmental record of America has become the sweetheart of the Left. From Nationalizing Detroit...

In the Washington mind, there are two kinds of private companies. There are successful if "greedy" corporations, which can always afford to pay more taxes and tolerate more regulation. And then there are the corporate supplicants that need a handout. As the Detroit auto makers are proving, you can go from being the first to the second in the blink of an election.

Truer words have never been spoken! The same D.C. busybodies who have spent countless hours and dollars regulating the auto industry and empowering the labor unions now is turning to the taxpayers and telling us we have to fix a broken industry, an industry broken in large part by the government and the unions who now want us to save the same jobs they have priced out of competitiveness.

For decades, Congress has never had a second thought as it imposed tighter emissions standards on GM, Ford and Chrysler, denouncing them for making evil SUVs. Yet now that the companies are bleeding cash, and may be heading for bankruptcy, suddenly the shrinking Big Three are the latest candidates for a taxpayer bailout. One $25 billion loan facility has already been signed into law, and Senator Debbie Stabenow (D., Mich.) wants another $25 billion, this time with no strings attached.
A bailout might avoid any near-term bankruptcy filing, but it won't address Detroit's fundamental problems of making cars that Americans won't buy and labor contracts that are too rich and inflexible to make them competitive.
As Paul Ingrassia notes nearby, Detroit's costs are far too high for their market share. While GM has spent billions of dollars on labor buyouts in recent years, they are still forced by federal mileage standards to churn out small cars that make little or no profit at plants organized by the United Auto Workers.

We ought to let GM and Ford declare bankruptcy, tear up their union contracts and dealership deals and start over as smaller, leaner and more competitive companies. Instead, under the benevolent leadership of Washington liberals and the capitulation of the now limp-wristed Bush administration the taxpayers will dump untold billions into a failed system, a bailout that will prolong the death throes but cannot fix the problem. Hey, sounds a lot like the way we treat public education!

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