Theatre of the Absurd

Article From: Products Finishing, ,

Posted on: 1/1/2009

SUVs on the altar, hybrids and a ‘car czar.’

The ongoing travails of the Detroit Three domestic automakers have evolved from an
American tragedy into a comedy of sorts. Unfortunately, the stakes here are too high for any of the goings-on in Washington and Detroit to be very funny.

In the Motor City, worshipers at one of the area’s largest churches were treated to the sight of three hybrid SUVs—one each from Ford, Chrysler and General Motors— parked just behind the pulpit. The church’s leader said he and other Detroit ministers would pray and fast until Congress voted on a bailout for the embattled automakers.

Ah, yes, Congress. Whatever kind of mess the Detroit Three have gotten themselves into (and it’s a big one), things really did not become over-the-top ridiculous until our esteemed lawmakers got involved. Polling has shown that a significant portion of the American public don’t like the idea of a multi-billion dollar bailout for the domestic automakers, but some members of Congress seem to be taking delight in their new-found ability to make the chief executives of major corporations grovel and beg for a handout. The spectacle has included the Detroit Three executives driving hybrid vehicles to Washington after being chastised for flying corporate jets to the initial bailout hearings.

To allow the domestic automakers to slide into bankruptcy and possibly not survive would be a big mistake. About a quarter of a million jobs, plus a couple million more at suppliers, dealers and other allied businesses, are at stake. Such a hit would only worsen an already deep recession.

As this is written, there’s no agreement on how or whether to try to save the domestics. Many congressional leaders, the current White House and president-elect Barack Obama have all pledged to work for the survival of the auto industry, leading me to believe that a deal eventually will be struck to keep the Detroit Three operating for the time being.

But questions abound. The biggest is probably, who’s responsible for this disaster? There’s more than enough blame to go around. Detroit Three management and unions certainly must shoulder some of the responsibility. In the bigger picture, the credit crunch brought about by the country’s financial crisis exacerbated the automakers’ already serious problems.

Congress has certainly taken note of management’s shortcomings, with some representatives calling on current executives to resign. And any deal that is eventually worked out will likely include appointment of a “car czar” to oversee the Detroit Three’s operations for the foreseeable future. Management, union members, shareholders and other stakeholders will all feel more pain before this episode is over.

Here’s hoping our leaders in Washington and Detroit can work together to help the Detroit Three find a way out of this mess. The alternative—almost certain bankruptcy for GM and Chrysler, likely bankruptcy for Ford and the possibility that the domestic auto industry will cease to exist—is completely unacceptable.

 

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