Bailing Out

I don't want to see the Big Three auto makers fail, not least because of the impact on an already weak economy if their workers and workers at their suppliers lose their jobs, retired workers lose their pensions, etc. Certainly there is merit in doing something to prevent a catastrophic collapse of a major American industry.

However, any help we give must have major strings attached. GM et al. didn't end up in these straits by way of a natural disaster; they made the decisions that led to their current situation. They chose not to be aggressive in improving gas mileage and taking the lead in hybrids and other alternatives; rather, they lobbied against aggressive standards for gas mileage. And they saw their overseas competition seize a growing share of the market as a result. They could easily have foreseen the possibility that gas prices might go up (there's a war on in the mideast, not to mention an ultimately limited supply of oil in the world) but they continued to focus their resources on big vehicles and inefficient manufacturing that isn't nimble enough to shift with the economic climate.

And then they were sufficiently myopic to show up in Washington with hats in hand looking for a bailout--having just arrived on their (separate) private jets. This is the multibillion-dollar equivalent of a streetcorner beggar asking for money for food then spending it on cigarettes and booze while the person who gave it to him is still standing there. 

But unlike the case of the guy on the corner, the "gimme some money, then screw you" demeanor of the Big Three execs isn't just hurting them. If we don't bail them out, the people who suffer will be the bottom o of the org chart, not the top. 

It's essential to provide some kind of interim aid, but it's critical that that help be contingent on a number of things: executives feel the belt-tightening at least as much as the people at the bottom; the companies demonstrate frugality in every aspect of their operations; the use of the funds be closely monitored; and most important, this financial crutch be used not to keep doing business the (failed) way they have been, but to redirect their business toward environmentally friendly vehicles and innovations. Because if they're not going to build reliable, affordable, sustainable cars using innovative technology and methods, they deserve to lose their business to somebody who will.