Republicans to Detroit: Drop dead

Posted Nov 17th 2008 5:30PM by Peter Cohan
Filed under: General Motors (GM), Politics

It looks like the automobile industry is being led like a turkey to the slaughter as we approach Thanksgiving. While companies like General Motors Corp. (NYSE: GM) have been working overtime to produce a fleet of statistics to bolster their case for a Washington bailout, it's clear that President Bush and the Republicans are eager to wield a sharpened ax on its ever-more vulnerable neck.

The pre-bailout buildup follows the same narrative structure as the one for the Iraq war and the $810 billion bank bailout bill. With the Iraq War, the specter of a mushroom cloud was dropped on our unsuspecting heads. With Paulson's plan for a reverse auction to buy toxic waste, it was the threat of heavenly retribution. And now, the auto industry is promising 2.5 million lost jobs and $200 billion in government costs -- up from $125 billion last week -- if Washington does not bail it out.

The political forces lining up against the automobile industry appear more powerful than those who want to bail it out. While congressional Democrats want to divert $25 billion from Paulson's plan to bail out the auto industry, Bush and the Republicans oppose the idea. And until January, they appear to have the upper hand.

Meanwhile, President-elect Obama likes the idea of getting the industry's stakeholders to agree on what a viable auto industry would look like before giving it government money. His idea makes sense to me because, as I posted yesterday, it was one of the reasons that the 1979 Chrysler bailout worked.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in GM securities.

Tags: auto, bailout, bush, democrats, detroit, gm, inthenews, obama, republicans

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Reader Comments (Page 2 of 2)

11-18-2008 @ 12:53PM

Mary said...

How dare the Big "3" ask for a bailout, the UAW has for years paid individuals to sit in a room all day doing nothing just in case they need them at some point. They have wasted way too much money over the decades for non-working individuals, retirement packages that most of us will never see. They caused their problems, let them file Chapter 11. As of this time we are still a capitalistic government (but not for long), companies that fail to produce the product needed at the time should fall on their face. Back in the 70's we were talking about fuel efficient cars where have the Big "3" been the last 3 decades. They are cry babies and run a business on their terms not on what the people of this country need. That's why I drive a Jetta diesel and get 50 miles per gallon, you never hear anyone talk about that, why weren't the Big "3" making diesel cars?

I do not want my tax dollars going to any bailout. It is a scary day when the Treasury Department is in control of our montetary system, what's next?

11-18-2008 @ 2:17PM

Bob said...

There is only one bigger loser than the big 3 of Detroit, and that is the republican party....What did you expect these shmucks to do on their way out of town??......They didn't mind signing off on a 700 Billion dollar bailout of Wall Street shysters, but heaven forbid giving a 25 billion dollar loan to help an American industry that's actually connected to our national security and directly involves 5 million working Americans directly and indirectly....You cons just don't get it, and THAT'S why the door will hit your fat asses on the way out...