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America's big three automobile makers are waging an aggressive campaign to get a financial bailout from Congress. To think that giving them the billions of dollars they want would actually improve the long-term performance of these terribly managed companies is the epitome of self-delusion.
When even Mitt Romney goes public in the New York Times speaking against the auto bailout and carefully explains why it makes no sense, you know that conventional thinking about American capitalism is in deep trouble.
Despite all the arguments against the auto bailout the odds are great that Congress will cave in and find a way to rationalize a billion-dollar handout to the Detroit car mafia. It will come down to saving millions of jobs. And that, to be fair, is one heck of good reason to bail the car companies out in our cascading national economic disaster, even if there is little long-term hope of a true competitive turn-around for the carmakers.
What Congress should ask in return is a major, drastic change in management of the big-three firms as well as strict limits on salaries and other compensation for senior managers. Congress should also demand some kind of ownership position so that, just in case, the companies ever make future profits some of them will be sent back to the government.
It would be nice to see President-elect Obama speak out forcefully and give his detailed demands for such an auto bailout. This change-focused politician should be demanding true structural change in the domestic car industry so that it becomes what it needs to be: a provider of quality and affordable cars that Americans really want and that also are environment-friendly. Though gas prices have come way down, this is not the time to stop demanding greater fuel efficiency from American cars.
Personally, I swore off buying an American car years ago after the last one I bought was such a crappy car that had terrible quality. I was much happier with cars from Japanese automakers which, for the most part, are made here in the USA.
To add a little more acid irony to this situation is that the heads of the big three came to Washington, DC in their swank private corporate jets. Just an example of the audacity of arrogance that characterizes corporate America these days. Among a long list of concessions the government should seek from these corporate losers is that they sell all of their private jets.
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