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Pelosi to automakers: Plans better be good
House Speaker Nancy Pelosi called on General Motors Corp. and Chrysler LLC to offer "credible" turnaround plans Tuesday, including pledges to meet tougher fuel economy requirements set by California and other states.They're in the process of going under for the third time. So put a brick in each of their pockets. In letters cosigned by House Financial Services Chairman Barney Frank, D-Mass., the California Democrat said the automakers should also commit to "protecting and sustaining the health and pension benefits" of workers and "an additional assurance that taxpayers benefit as corporate conditions improve and shareholder value increases." When they wink out of existence there isn't going to be any health and pension benefit for the workers and peasants. How's Studebaker-Packard's shareholder value doing lately? What kinda taxpayer benefit is American Motors providing? GM and Chrysler are set to submit extensive plans for restructuring their businesses to the Obama administration as part of the $17.4 billion in government loans that have kept them solvent. The market cap for GM is about $5 billion these days. We loaned them about $13 billion and we're going to loan them another $15 billion regardless of whether or not the turnaround plan meets San Fran Nan's test of 'credible'. And that's on top of the $18 to $20 billion GM owes to private lenders that they can't pay off. This is brilliant, simply brilliant use of public money ... Both were ordered to make steep cuts in debt and rework agreements with the UAW. "We are writing to stress the importance of your submitting a credible restructuring plan that results in a viable industry," Pelosi and Frank said in their letters. "And while you're at it, find Judge Crater." Chrysler has said it needs an additional $3 billion to ensure its survival on top of its $4-billion loan, while GM has not made any additional request for aid beyond the $13.4 billion it has received so far. Better to break either or both companies into their component parts and let them sink or swim, rather than creating a single point of failure. Even if the nation's driving Toyotas and Subarus, the military will still need Hummers and 2 1/2 ton trucks. The letter from Pelosi and Frank to GM Chairman Rick Wagoner and Chrysler Chairman Robert Nardelli asks the automakers for "a demonstration of your ability to meet or exceed" federal fuel economy requirements and "the emissions standards adopted by California and other states, if they receive federal approval." And how does that make them more competitive? It won't, but the cars they build to meet those standards will cost more. Cost more=sell fewer. How can you go wrong? California and 17 other states want to set limits on greenhouse-gas emissions from vehicles that automakers contend would lead to state-by-state sales limits on many models. The Obama administration may reverse a decision by the Bush administration and allow the rules to take effect within a few months. Brilliant. Simply brilliant. Posted by: Fred 2009-02-15 |
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