Detroit is failing and they want us to help. For years the “Big
Three” automakers (General Motors, Ford and Chrysler) have rebuffed
the experts, turned a deaf ear to the demands of the consumer and
arrogantly ignored the success of their competitors (now their
betters). They have continued to sell through an antiquated franchise
model and have reacted far too slowly, and probably too late, to
changes in the marketplace. And now that the market has selected them
for well-deserved extinction, they are turning to the federal
government (us) for a minimum of a 25-billion-dollar bailout.
In a speech last week at the Ronald Reagan Library, Treasury
Secretary Henry Paulson acknowledged how important the auto industry
is to America and that its impending failure is not good for the
country. Yet he does not intend to use any of the $700 billion
dollars at his disposal to bail out Detroit, saying, “It doesn’t do
any good to put money in unless there is a clear path to viability.”
While, like most Americans, I despise the idea of bailing out an
arrogant, antiquated, failing industry, I also fear the consequences
of up to 2.5 million more Americans being out of work – many through
no fault of their own. So, taking the liberty of speaking for the
American people, I offer a three-point plan that will make this
bailout palatable, if only barely. When the top executives at General
Motors, Ford and Chrysler and the top union executives are willing to
accept the following three concessions, I will happily ask the
federal government to turn over the $25 billion dollars.
1. Every executive at the Big Three will tender a resignation,
effective 90 days from receipt of the bailout money. A special
executive team will be installed to run all three companies and will
use the 90 days to choose to accept or reject the resignations on an
individual basis. All golden parachute arrangements for outgoing
executives are cancelled. This will allow us to unload the weak, keep
the strong and recruit new and innovative thinkers. For the sake of
recruiting simplicity, please start by looking at Honda, Nissan and
Toyota; they seem to have some pretty sharp people.
2. The unions are going to pitch in as well. The average hourly
compensation for the Big Three is $73, while Toyota in Kentucky is
$48 per hour and for all U.S. workers it is $28 per hour. Even if we
had forward-thinking executives in Detroit, they would be crippled
paying workers 50% more per hour than their competition. It is a
ridiculous situation and has to end for the Big Three to have any
chance of surviving. We are going to ask the Toyota plant in Kentucky
– successfully making both cars and money – to share their union
contracts with the Big Three and their unions. The unions are going
to accept these contracts, verbatim, starting the first day the
bailout dollars roll in. For those union bosses and union members
screaming bloody murder, please remember the choice is not between
$73 per hour and $48 per hour, but rather $48 per hour – and nothing.
3. The 25 billion dollars is not actually a bailout, or even a loan.
It is payment for 83,000 electric- or solar-powered cars ($25 billion
dollars divided by average sales price of $30,000) that will travel
75 miles per hour and travel at least 250 miles between charges. They
have until 2015 to deliver the cars.
If – and only if – the Big Three executives and unions are willing to
accept these terms, we will happily purchase the 83,000 cars and pay
now, in full. This is an offer, not a negotiation. It is our money.
We have worked hard for it and have no intentions of giving it away
to a group of people who proved to be only incompetent and greedy.
This is what I’d say to the Big Three executives: If you choose not
to accept our offer, there are two alternatives. One, simply go out
of business. No doubt it will be painful, but only in the short run.
The airlines did it, some survived and some didn’t, but the planes
are still flying and consumer demands are being met. Two, ask the
American oil companies for a handout. They have made billions of
dollars in profits this year alone and might just be motivated to see
you stay in business. Either way, we, the people, will survive. It’s
up to you whether or not you do.