Let's go a back a few months at this scenerio that could have played out: A few months ago, when TARP was being frantically shoved down everyone's throat, the CEO's from the Big 3 worked ardently in their offices trying to figure out the who, what, when, where and why's of the issues of the companies. How bad is it? What can we do? They may think, "hey we could go to Washington today and lobby for 25 billion to use on future-thinking autos and then go behind the scenes to try and get the restrictions taken off the 25 billion, but you know what, we may lose credibility. Instead, let's focus on figuring out our problem and developing a plan. Once we have our ducks in a row, we will approach Congress for help."
Four weeks later, when they had reviewed the issue and gotten their ducks in a row, they called Pelosi and said, "we really need help. We are sorry. We need a bailout too. We have made mistakes. We are not going to make the same mistakes. We expect to be drilled on our mistakes and will answer honestly. We will need to make drastic changes in our production. We have failed to design and produce for the future. Although we have been shining stars where it comes to employee benefits (tuition for workers; health care; scholarships for children, pension; reduced rate auto), we have failed to adequately fund our promises--failure in decisionmaking that goes back decades. We need to fundamentally change our company. Our focus will be on producing forward-thinking cars while providing our employees with the best pay and benefits possible within our economic model. We have thoroughly reviewed the situation and have come up with a plan we would like to share with you. We respect that the TARP crisis was stressful and didn't want to add to the problem at that time until we could answer questions and propose solutions. We would really appreciate it if you could help us. We can be in DC in hours.
Pelosi responds: I knew it was bad. Your decisionmaking is problematic. Producing the Hummer, and other gas guzzlers is problematic. Your reluctance to produce forward thinking vehicles is problematic. My colleagues on both sides of the aisle are going to have problems with this. Be here next week, hat in hand and ready to answer questions and propose solutions. Have realistic dollar amounts to get you through 1, 3, 12,24 months. I am on your side, and we can't lose our auto industry, but we have to do this right.
The CEO's get on a conference call and brainstorm.
Should be produce films showing the devastation of losing jobs---we can produce one that says 13 million jobs will be lost if one of the companies goes down? --No, let's not do that, if we are saying we are pinching pennies, we should do so. Also, it may be inflammatory. Although we may think that could happen, the resolve of the American people is strong and that very well may not happen.
Should we put out talking points such as: this is all caused by the credit crisis; Big 3 companies are already positioned for the future; Big 3 companies are no different than the Japonese because they are down as well; the quality of Big 3 cars is as good if not better than foreign cars; Americans love the Big 3 cars? --No, we have made mistakes. We have problems with our cars. We have made poor management decisions. We were having problems before the credit crunch. Our studies show that many Americans prefer foreign cars and view them more favorably. Let's not get defensive. Let's go there, hat in hand, and not try to excuse our behavior. Our behavior was wrong. Even though we were doing our best and even though we had good intentions, we made mistakes.
Should we go to DC and make the case that we are too big to fail? Maybe we can basically scare them into giving us a loan? We can say that if one company goes bankrupt, we will have an economic depression (hey, that wouldn't be a lie, because we are probably going there anyway). --No, we are not going to do that. Even though we believe that to be true, we live it and are so close to it. We may not be the most objective people. We don't like to be threatened, why would they. From fast food to retail, from bill collectors to factory workers, in the next few months, job losses are going to be everywhere. If we are perceived as saying "we are special," and deserving different treatment from others, they may just look at us and say "f*ck you."
A week later, CEO's of the big 3 arrive in DC and are grilled for two days. They answer every question to the best of their abilities. The committee (all but the very right) is pleased by their preparedness. They proudly speak of the importance of the auto industry (as others are as well) to the American economy and American history and they apologize that they weren't good stewards. They come prepared with plans and needs. They acknowledge that it is going to be very expensive, but they had to be realistic. They didn't want to come with an unrealistic view of their company's economic status. They wanted to bring it all to the table and let the Congress make as informed decision as they could. GM asks for a total of $72 billion; Ford asks for $20 billionLOC; and Chrysler asks for $47 billion.
The Republicans go nuts, but they are partially muted by the honesty; humbleness and preparedness of the CEO's. Instead of calls to the office being 90-10 against the bailout, they are close to 50/50. Congress stays in session for 2 days and debates back and forth and then pass a bill that gives the companies what they asked for.
Pelosi sits back and sighs. "Thank God, they didn't come in high faluting blaming everything on the credit crunch and saying 'the past is the past' when asked about problems. As hard of a fight as it is, it is so much better to have prepared people ask for the whole basket then constantly nagging and lobbying and putting out ads and pestering to get a piece of what they want, knowing full well that the moment they get what they want they are going to start lobbying, nagging and putting out ads for more. I am ready for a drink."
And with a few glasses of Merlot down, she turns out the light of the office, the Big 3 saved and a story to tell the great grandkids some day.
Far away--Beth2008 turns off the tv. "Not another bleeping bailout. These bailouts make me nuts. Well at least this one isn't as bad. The CEO's were prepared and realistic. They acknowledged their mistakes. They didn't even hint that Americans who bought foreign cars were stupid and just hadn't figured out that American cars are better. They just ran off with Fort Knox. Wouldn't that be great if they were for real and had learned their lessons. This might be one of those stories you tell the grandkids. I can here it now, 'grandma, where were you when Congress gave the Big 3 lots of money and they made lots and lots of money from that and now we can fly instead of taking forever to get places.'"
**Sorry if not a typical diary, but hopefully this makes a point better than I have been able to make.
Do you think the Big 3 would have the money they want if they would have behaved differently?