President Bush, are you kidding me? The Big Three need a different kind of intervention, a reality check. It's called a date with the bankruptcy courts. The domestic auto industry starts off with approximately a $1500 health care and pension cost per vehicle disadvantage from the get-go; we have seen muted reaction by Big Three management to the fact they need fewer incentives to sell more fuel-efficient models; foreign manufacturers seem to enjoy higher repeat customer purchases and tend to dominate the highest price-retention ratings; we still see some productivity and reliability advantages for vehicles from certain foreign producers like Toyota and Honda. Consumer Reports listed only one domestic vehicle (a Chevy pickup truck) among its top 2008 models.
I certainly don't think that we need a government car czar micromanaging product decisions, or the Congress using their lender status to force certain product changes (e.g., CAFE standards) demanded by environmental special-interest groups. This is not to say I think the Big Three management has done a good job; the fact that I'm willing to let the companies go into bankruptcy is a testament to that. But Big Labor is in a state of denial; I think there's no way politically they can concede the structural compensation issues without the bankruptcy courts forcing it on them. The respite from high fuel costs is an artifact of the global recession, but the Big Three never made a truly competitive fuel-efficient alternative to the popular hybrid Toyota Prius, despite the fact that Consumer Reports has listed it as a top model for the past 4 years.
Big Labor is living in a fantasy world if it thinks the domestic auto industry is viable in the long term without making the necessary concessions now; it apparently hasn't noticed UAW membership has declined nearly 70% over the last 3 decades. I heard UAW President Gettelfinger politically attack the GOP over the recent scuttling of the bridge loan legislation in the Senate saying the unions were being asked to make "all the sacrifices" (let me see: how does the market valuate automaker debt and share price? Did labor rates decline like the other stakeholders' interests did?), but all he's trying to do is to postpone the day of reckoning--at the expense of the American taxpayer.
If President Bush decides to use the TARP to fund something that the Congress just refused to do, I will consider it an abuse of his power. The TARP was never intended for the President to pick winners and losers in the marketplace based on the greater political power of a particular special interest group, like the UAW. The erosion of domestic market share for the Big Three has not happened overnight. The American consumer/voter has already made choices in the marketplace.
The President should not make the U.S. government a codependent of the Big Three's dysfunctional business model and its structurally uncompetitive contracts with the UAW. It's not clear how the President reconciles his view with economic liberalism; it's almost as if his sole intent is to prevent the Big Three going into bankruptcy on his watch.
