GM, Ford get in line for government funding

So where do the CEOs of General Motors (NYSE: GM), Ford (NYSE: F) and Chrysler go when they need to turn their companies around? Are they huddled in their boardrooms in Detroit, planning sales strategies with top executives? Are they cracking the whip in their design studios as they seek to build the perfect car?

Nah. They go where every other corporate bigwig goes when there's trouble afoot: Washington, D.C., home to the world's most dependable source of capital -- the U.S. Treasury.

This week, Rick Wagoner of GM, Alan Mulally of Ford and Bob Nardelli of Chrysler are testifying before Congress as they go fishing for $25 billion in funding to help develop more fuel efficient cars. Now that the SUV craze is over and Detroit has consumed the hundreds of millions in fat profits those trucks produced, the car companies find that they failed to save for a rainy day.

It's more than a little ironic that the one-time powerhouses of the American economy are begging the federal government for help. Major corporations have spent the last 40 years fighting government involvement in the economy -- the Big Three fought government rules requiring seat belts, for goodness sake. And GM played a major role in defeating national health insurance decades ago, among many other sins committed in the name of maintaining the glorious free market. But when they hit a wall, the corporate powers know just where to go -- and it's certainly not to the free market. No, Uncle Sam is a far more reliable source, especially in hard times. So much for free market capitalism.

The only problem is, with the bailout of AIG among others, Detroit may not like its place at the end of the state capital line. And the Big Three had better hope that voters don't start wondering why the government is spending the limited capital of the American people on an industry that is currently dedicated to lowering the wages and eliminating the benefits of its workers.

I certainly don't want to see large American companies go out of business. I just hope that they repay the generosity of the tax-payers with something other than low wages and canceled pensions.

UPDATE: In response to a question in the comments about GM's role in opposing national health insurance, you can start reading about that shameful history in a New Yorker piece by Malcolm Gladwell. Here's an excerpt:
In 1945, when President Truman first proposed national health insurance, they [union leaders] cheered. In 1947, when Ford offered its workers a pension, the union voted it down. The labor movement believed that the safest and most efficient way to provide insurance against ill health or old age was to spread the costs and risks of benefits over the biggest and most diverse group possible. Walter Reuther [the national president of the U.A.W at the time]...believed that risk ought to be broadly collectivized. Charlie Wilson [president of G.M.], on the other hand, felt the way the business leaders of Toledo did: that collectivization was a threat to the free market and to the autonomy of business owners. In his view, companies themselves ought to assume the risks of providing insurance.
If that's too 'liberal media' for you and you need something more academic, try For All These Rights: Business, Labor, and the Shaping of America's Public-Private Welfare State (Princeton, 2003) by Jennifer Klein, a labor historian at Yale. Please send your revised analysis to me after you do a little reading . . .
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