The (Draft) Auto Bridge Loan Plan

Here’s a copy of the draft plan. It closely resembles what we’ve been hearing: the designation of an "auto czar" (AC–though it is called a President’s Designee) who will dispense funds to those auto companies that need it, with the requirement that by March 31, the companies restructure with the oversight of the AC. The AC is empowered to assist in negotiations with retirees, unions, dealers, and creditors right now, but can come back to Congress and ask for more authority if need be (presumably, in case this person had to make bankruptcy court type decisions). The taxpayers get warrants and or a piece of Cerberus in exchange for their trouble.

Note, the AC must be picked by the first of the year. In other words, George Bush, not Barack Obama, will get to choose the AC.

Here are the other interesting details:

There’s one clause which I’ve dubbed the "Nancy Pelosi clause" requiring the car companies to drop their suits against increased emissions standards in CA and other states:

(g) WITHDRAWAL FROM CERTAIN ACTIONS.—The terms of any financial assistance under this Act shall prohibit the eligible automobile manufacturer from participating in, pursuing, funding, or supporting in any way, any legal challenge (existing or contemplated) to State laws concerning greenhouse gas emission standards.

And there’s a clause which I’ve dubbed the "Atrios clause" requiring car companies to consider moving some of their SUV capacity into producing transit vehicles:

(a) IN GENERAL.—Each eligible automobile manufacturer which receives financial assistance under this Act shall conduct an analysis of potential uses of any excess production capacity (especially those of former sport utility vehicle producers) to make vehicles for sale to public transit agencies, including—

(1) the current and projected demand for bus and rail cars by American public transit agencies;

(2) the potential growth for both sales and supplies to such agencies in the short, medium, and long term;

(3) a description of existing ”Buy America” provisions, and data provided by the Federal Transit Administration regarding the use or request of waivers from such provisions; and

And there’s a provision I’ll call the "Delta/Northwest clause" which requires the car makers to get rid of their corporate planes:

(4) DIVESTITURE.—During the period in which any financial assistance provided under this Act to any eligible automobile manufacturer is outstanding, the eligible automobile manufacturer may not own or lease any private passenger aircraft, or any interest in any such aircraft, except that such eligible automobile manufacturer shall not be treated as being in violation of this provision with respect to any aircraft or interest in any aircraft that was owned or held by the manufacturer immediately before receiving such assistance, as long as the recipient demonstrates to the satisfaction of the President’s designee that all reasonable steps are being taken to sell or divest such aircraft or interest.

This has the perhaps onerous but probably salutary effect of making it harder for auto company employees to make trips to suppliers in Northern Mexico. (I wonder whether that means that Cerberus–or just Chrysler–has to lose the corporate plane? What will Dan Quayle do if he has to fly commercial???)

And finally, the bill gives the AC veto power over acquisitions or sales worth more than $25 million:

(1) DUTY TO INFORM.—During the period in which any loan extended under this Act remains outstanding, the eligible automobile manufacturer which received such loan shall promptly inform the President’s designee of—

(A) any asset sale, investment, contract, commitment, or other transaction proposed to be entered into by such eligible automobile manufacturer that has a value in excess of $25,000,000; and

(B) any other material change in the financial condition of such eligible automobile manufacturer.

(2) AUTHORITY OF THE PRESIDENT’S DESIGNEE.—During the period in which any loan extended under this Act remains outstanding, the President’s designee may—

(A) review any asset sale, investment, contract, commitment, or other transaction described in paragraph (1); and

(B) prohibit the eligible automobile manufacturer which received the loan from consummating any such proposed sale, investment,
 contract, commitment, or other transaction.

This will prevent Cerberus from selling Chrysler to Dongfeng. I also predict it will lead to some very fascinating hearings in which GM and Ford explain the importance in investing in factories in places like Russia.

That’s my quick read. Now let’s see if they can get 60 Senators to go along…

119 replies
  1. eCAHNomics says:

    Sessions was bloviating against it on the senate floor when I flipped there after the presser was over.

  2. plunger says:

    Between the Communist connotations of monikers like “Czar” and the Nazi connotations associated with use of the word “Homeland,” I can’t decide who the globalist tools in Congress are positioning us to become most like (as they nationalize virtually everything), but I know one thing, this is not America.

    “Car Czar?”

    Karl, is that still you? Haven’t you been indicted yet?

    Is “George The Great” REALLY leaving office?

    Car Czar my ass.

    • eCAHNomics says:

      In one of my few cases of childhood dislexia I thought it was craz for years, until I had to read it outloud in elementary school, much to my embarrassment.

      However, in this application, car craz sounds about right.

    • eCAHNomics says:

      Has the right ring. But he’d have to give up his opium business so he’s probably not available.

  3. phred says:

    Does Congress at least reserve the right to approve the AC designee or does Bush get to appoint any nitwit that stumbles across his path? Heck… maybe W will appoint himself. He needs to line up a job and I hear all the baseball teams are taken.

  4. allan says:

    Fortunately, the Republicans will draw a line in the sand.

    Because they would rather lose an industry than lose the nest election.
    Party over country. Every time.

  5. Leen says:

    Just keep wondering when Senator Dodd will ask for some resignations on Wall Street and the “restructuring” of Wall Street?
    Nader on the auto “bridge…restructure” He makes some great points…..ers_return

    RALPH NADER: Well, Juan, first of all, it needs to be made clear that the workers and the UAW have given up far more than what the government subsidy will come down to in dollars, if what the auto companies are asking for is accepted by Congress. They gave up huge—billions of dollars in 2007, and they’re giving up more in 2008.

    And what this whole debate is lacking is any concept of numbers. For example, if this is a $34 billion so-called bailout, what is it really? Well, it’s subsidized loans, or maybe they’ll turn it into loan guarantees. And depending on what the government gets in return, that is a fraction of what—as Amy said, of what Citibank and the financial industries have gotten in New York.

    The reason why there’s so much focus on the auto companies is not just its role in the American economy, but it’s public, and there are congressional hearings, where the wave of the gigantic bailout after bailout of Wall Street occurred largely on weekends in secret meetings between the Federal Reserve, the Treasury Department, and the goliaths on Wall Street. And these were sweetheart deals. Citibank got a huge sweetheart deal with very, very little reciprocity.

    Now, if the Congress is going to move to save the domestic auto industry, they’re going to do it as taxpayers, as shareholders, as creditors, and they will drive a hard bargain. And as a result, the taxpayer can get preferred shares, they can get warrants, so that if the companies recover, the taxpayer gets not just the money back, but a huge surplus. I mean, Ford Motor Company stock now is around $2.60. If Ford modestly recovers, it could go to $20. And, of course, those Treasury warrants and preferred shares would come out very, very handsomely, as they did in the Chrysler bailout when Iacocca turned it around in 1980 and ’81.

    So, what I think should be done is for the government to say, “OK, you want our help. We are going to own a part of you. We are going to be creditors and restructure you; remove the board of directors and the executives that are deemed not to be performing over the years; put people who know how to produce fuel-efficient, emission-controlled safe motor vehicles in place; and reform the whole area of shareholder rights,” because the government will be a shareholder. And since the government is effectively an insurer, they can move to apply the principle of insurance and loss prevention and produce motor vehicles and alternative transit, mass transit, that will damage less people on the highway and the environment. So, I call it government capitalism, where the government plays the role of a shareholder, the role of a creditor, the role of an insurer, and restructures the entire industry.

    I must say, on the UAW, though, the biggest mistake the UAW ever made in this area was to support for thirty years, against consumer and environmental groups on Capitol Hill, a freeze on fuel efficiency. And because the government could not upgrade its fuel efficiency for over thirty years, from the 1975 standards, the Japanese and other foreign competitors were able to eat a larger—eat into the market share of the domestic industry. And I’m glad to hear Wendy say that it seems like some workers, at least, understand that that’s got to change.

  6. Phoenix Woman says:

    Bush is crapping all over the proposal already:

    Congressional Democrats on Monday sent the White House a draft of a roughly $15 billion auto bailout they aim to bring to a vote this week, but White House officials gave a cool initial response.

    The measure would rush bridge loans to Detroit’s struggling Big Three but would also demand that the auto industry restructure itself in order to survive and would put an overseer chosen by President George W. Bush in charge of monitoring that effort, according to a draft obtained by The Associated Press.

    The White House had just begun evaluating the Democratic language, according to officials who would comment on the continuing negotiations only on condition of anonymity. But they said the draft didn’t appear consistent with the principles behind a broad agreement to give long-term financing only to viable companies. They said it was hard to tell definitively whether their doubts were warranted and they would continue talking to Capitol Hill representatives.

    • TobyWollin says:

      “would put an overseer chosen by President George W. Bush in charge of monitoring that effort,”
      Can I just say that this gives me chills; it really does. Can we say “Fox put in charge of the henhouse?”

  7. emptywheel says:

    Ah good–it won’t be Mitt:

    While the measure would put an administration official selected by Bush in charge of setting terms for restructuring, the decision about whether the terms were being met would not be made until President-elect Barack Obama had been sworn in. Congressional Democrats and the White House were working to find a broadly supported candidate who could span the two administrations.

    Congressional officials said Kenneth Feinberg, the lawyer who oversaw the federal Sept. 11 victims’ compensation fund, was under consideration for the position.

    Of course, I’m curious whether Feinberg knows diddly about the auto industry.

    • readerOfTeaLeaves says:

      Why would he care? He’s not the least bit interested in autos or any industry but debt and junk bonds, as near as I can suss out.

      I doubt he’d give a damn whether GM made toy balloons; what he cares about is getting his hands on the finance arms… or so I’d concluded. Am I mistook?

      • emptywheel says:

        He’d love it because it’d give him another opportunity (like the UT olympics) to come in and save something. Plus, he’d get the ability to bust the union.

        • readerOfTeaLeaves says:

          oh… I think you mean the Mittster, whereas I was alluding to Feinberg (Cerberus). Sorry about the confusion.

          Either way: Bain Capital ASSETS Management, Cerberus ASSETS Management… they’re all classic neofeudalists IMHO.

        • bmaz says:

          He’d love it because it’d give him another opportunity (like the UT olympics) to come in and save something. Plus, he’d get the ability to bust the union.

          Yeah, well, the down and dirty from what I understand, and I have friends that were up there in Salt Lake and semi-involved in the bid, Dave Johnson and Tom Welch, really had done everything, and Mitt came in at the last minute simply as a talking head face man and really didn’t do too much. But they had to crap on Johnson and Welch to get around the bribery thing that they had all agreed to and that was standard procedure for Olympic bids at the time. Mitt is credited with bringing in copious amounts of advertising, but that always rolls in right before the games start. Bottom line, Romney got a lot of rep for doing diddly squat. So I am informed anyway.

    • plunger says:

      “A lot of recent films seem unsatisfied unless they can add final scenes that redefine the reality of everything that has gone before; call it the Keyser Söze syndrome.”

      Sounds like Rove’s re-reality assignment for Dubya. Before he’s finished, Amercans will believe that Bush shot it out with Osama at the OK Corral back in 2006, and kilt’im dead.

    • Larue says:

      Good lord, that’s got to be one of yer best . . . although, that I understood it’s every word might disqualify it . . . *G*

      Nicely woven P- *G*

  8. klynn says:

    Transplants keep moving…

    And yet they are not making a dent in this state:

    South Carolina’s unemployment insurance trust fund reserve will soon run out of money, possibly before year’s end, the head of the state Employment Security Commission said Thursday.

    Looks like Lyndsey Graham needs to have a talk with Corker. See, Corker’s birth state is South Carolina. So, if Corker trashes any auto bailout, he kills the economy of the state of his childhood.

  9. readerOfTeaLeaves says:

    This will prevent Cerberus from selling Chrysler to Dongfeng. I also predict it will lead to some very fascinating hearings in which GM and Ford explain the importance in investing in factories in places like Russia.

    It’s too much to hope for, but I wish that this translated to:
    Sen Chris Dodd (to Paulson and Bernacke): “Go ‘cheney’ yourself, you asshatted f*ckwits, and don’t even think about asking me for a dime until you haul your sorry asses up in front of my committee where I’ll make damn certain that you are sworn in for any and all testimony you give.”

    Pelosi (to financiers): “Grow up, babies. I changed the diapers of five children, and its’ too bad for you if your mommies didn’t teach you how to make your own beds**, take out the garbage, and clean up your rooms. Time to grow up, you insolent adolescents.”

    Meanwhile, I note with interest that today Harry Reid has evidently sent a letter to Merrill Lynch ‘advising’ that the $10 million bonus their CEO is requesting after a year of losing ‘only’ $10 billion is not going to sit well with ‘the American public’. Here’s hoping Harry Reid cc’s a copy of that little gem to Cerberus.

    Bottom line: Congress has no reason whatsoever to hand our collective asses over to Cerberus. IMHO, Congress should have limited the bailout ‘restructuring plan’ ONLY to PUBLICLY held corporations. But no doubt including Cerberus was a condition of Bush, Corker, Shelby, McConnell, and the other ‘free marketeers’.

    ** via a clip at Crooks & Liars, I saw Michelle and Barak Obama tell Barbara W that Malia and Sasha would have to make their own beds in the WH. And I thought, “Damn. Those two little girls don’t know how lucky they are!”

  10. Leen says:

    Can you imagine Ralph Nader as the Auto Czar?

    Ralph Nader “Washington Holds all the Cards.” “A great opportunity”

    RALPH NADER: Well, I was a young lawyer, and I went to Washington to federally regulate the auto companies for safety standards, fuel efficiency, emission control in the mid-1960s, and we had good chair people of House and Senate committees, and Lyndon Johnson was willing to sign these bills, and the press was willing to cover the story as an ongoing story instead of a sporadic feature. And it was really the American dream of justice. And the result was the saving of millions of lives and injuries, and it led to the fuel efficiency laws and reduction in emissions from motor vehicles.

    And then we hit a stone wall the moment that United Auto Workers allied itself with the auto companies and stopped any increase in fuel efficiency standards. That opened the door for the SUV gas-guzzlers, etc., and that differential that consumers saw between what foreign car companies were selling and what Detroit was selling.

    I view this proposed bailout as a mechanism to further those statutory regulatory goals of fuel efficiency, pollution control and safety. What couldn’t be obtained by regulation, because of the opposition of the auto company lobbyists and their allies, now can be obtained, because Washington holds all the cards. The moment Washington signals that they’re going to save the domestic auto industry, the auto industry has no cards. Washington has all the cards. And if they represent the motorists and the environment and the workers, they can turn this crisis into a great opportunity.

    On the other hand, the right-wing forces in Congress and elsewhere want to use this crisis to break the union, to destroy the higher standard of living that autoworkers have been receiving compared to other workers. So there’s a real struggle going on. And the problem, Amy, is it’s being done in a frantically rushed manner, and that’s bad, because this is a very complex package they have to work out if they’re going to further the regulatory goals and if they’re going to restructure the industry.”

  11. plunger says:

    “Hamid CarCzar”

    I mean seriously, it sounds as though the US Military could use a car Czar in Pakistan just to keep them from blowing up.

    Hamid, brutha, you da man!

    • foothillsmike says:

      I can see it now waiting at a RR crossing while a locomotive pulls a bunch of suburbans down the track.

  12. plunger says:

    How much has John Snow pocketed personally from his relationship with Cerberus? How about Dan Quayle?

    Was either involved in the absurd investment decision and the stripping out of assets from Chrysler after the acquisition?

    Why are we sending these people tax dollars? Did they pay any corporate taxes? Why aren’t these idiots pushing more of their own chips into the pile in order to try to salvage their own bad investments?

    • readerOfTeaLeaves says:

      We’ll never know. Cerberus is PRIVATE equity. As such, they reveal nothing (because presumably that would impede their success, which is partly based on being unpredictable, not showing their hand, and remaining out of sight).

      Think ‘financial vampire’, and things make a bit more sense; sucking the life out of companies in the dead of night, so to speak.
      Here’s hoping Ford can find a lot of garlic necklaces, because they may need ‘em.

  13. plunger says:

    Sam Zell made a really stupid investment choice when he acquired Tribune. He took a risk, and now he’s facing the consequences of it.

    I haven’t heard him ask me for a penny.

    Three-Headed Dogs = Cerberus…..rch+Images

  14. Blub says:

    btw, if the bridge happens, I’m hearing from several different market people that you’ll be seeing some substantial value funds jumping in to GM stock.. will provide a little bit of a boost.

    • plunger says:

      I heard on CNBS that taxpayers will be in first position and common shareholders will be subordinate to taxpayers.

      If there is any bounce, I believe it will be sold into. GM = dead public company where stakeholders are concerned. Shareholders bet on the free market, and lost.

  15. Scarecrow says:

    It would be extremely difficult to sort out a good plan in the public interest under the best of circumstances. We’re not quite sure what a sustainable industry looks like, whether that’s compatible with public policies favoring fuel efficiency and non-carbon fuel alternative, and the US generally doesn’t have an explicit “industrial policy” to guide its actions.

    But what we’re seeing now is very unlikely to be even thinking in those terms. We have a 3-4 way conversation occurring, between the WH, anti-Detroit Congressional Republican, most Democrats and the Obama people, and at least two of these groups are not functioning in good faith. Extortion better describes them.

    Allowing the worst President in a hundred years, whose economic oversight has wrecked the economy, a veto, is submission to blackmail. The Republican are waging class and regional warfare. Obama is being coopted, so he seems to be getting a real lesson in what it’s going to be like trying to get Republican concurrence next year. He’s learning how outrageous they can be, but the lesson is at the expense of the UAW and the economy. In the meantime, no one is calling the WH and the Republican Congress what they are: criminal thugs.

  16. Leen says:

    WTF? Were the Wall Street execs required to give up their “corporate planes” I just refuse to accept that there are different demands put on one group of corporate welfare kings and not on the other corporate welfare kings.

    What is with Senator Dodd demanding resignations from one fat cat group and not the other. What happened to the discussion on the “restructuring” of Wall Street?

      • plunger says:

        That’s because they own the “lawmakers,” and “Justice.”

        Two contradictory Titles if ever there were two.

      • Leen says:

        Did you hear Senator Dodd ask any of the Wall Street Corporate kings to resign? Did you hear our reps tell them that they have to give up their planes to get the money? Did they demand the banking industry supply a “restructuring” plan?

        I want all the rich white corporate welfare kings treated equally

        • hackworth says:

          You and anyone with any common sense. Congress is pathetic for buying Paulson’s deal. Some are complicit in this rip off, no doubt.

    • readerOfTeaLeaves says:

      Oh, here’s hoping that Dodd uses GMAC and the finance arms of these companies as an opening to get Paulson and Bernacke right smack in front of his committee to testify about the finance bailout.

      Might be a good time to buy futures in popcorn…

      • hackworth says:

        That’s a huge move. Corker and Shelby really made people believe that no money would be forthcoming. My guess is GM will open higher tomorrow and close lower than the early high. A buy order at 4.50 will probably fill. GM is a good deal at this price. It should get another dollar bump when the deal gets done. Then it will settle in the fours again. Of course, I don’t know anything.

    • Leen says:

      Senator Hamsher has a nice ring. Would hate to lose Jane but would really like to eventually witness her inside doing the same kind of shaking and moving that she has been doing out amongst the regular folks.

      Medea Benjaman moving to Washington D.C.
      Ralph Nader and Medea Benjamin on Obama’s Cabinet and Grassroots Organizing Under the Next Administration

      “MEDEA BENJAMIN: We have people we know that have been appointed or are advisers. I mean, we’re excited that some people with some progressive views are going to be in this administration. We have friends who are moving to Washington to take lower-level positions. And we feel like we cannot give up and say, just because we don’t like the cabinet positions, we don’t like a lot of the people he’s appointed, that we’re going to say, OK, you know, he’s already betrayed us. No, no. We’ve got to get in there and be in there from day one.

      We’re even part of organizing an inaugural peace ball on the day of the inauguration that sold out in one week, a thousand people—Amy Goodman is going to be there; I hope Juan will be there—to say peace is on the agenda. We’re going to be at the airports. We’re going to be at Union Station in Washington, D.C. when people arrive to the inauguration with quotes of Barack Obama and other people saying, you know, this is what he stood for. He stood for getting the troops out of Iraq. He stood for talks without preconditions. We’re going to remind people as they come in that this is what we’re hoping will happen.”

      Medea Benjaman and Ralph…..enjamin_on

  17. rwcole says:

    Allowing Clusterfuck to pick the AC is intolerable. Wait until the Obama presidency starts- if that means chapter 11, then so be it..

    • Blub says:

      this is actually not that complicated. there should be a bridge facility structured as a revolving credit line, with three eligible borrowers. Drawdowns tied to 30 day certification of cash positon (working capital deficiency) with a bi-directional cash sweep. Takeout through permanent restructure facility to be negotiated. No czar needed.

      • bmaz says:

        this is actually not that complicated. there should be a bridge facility structured as a revolving credit line, with three eligible borrowers. Drawdowns tied to 30 day certification of cash positon (working capital deficiency) with a bi-directional cash sweep. Takeout through permanent restructure facility to be negotiated. No czar needed.

        This is about right. In a way, could be even simpler. GM, to the best of my knowledge has unencumbered assets; those backing up the preferred stock as collateral for an accessible loan window ought to be enough. The rest is pure political horse manure.

        • readerOfTeaLeaves says:

          But here’s one of the things that I still can’t figure out.
          First, if I’m Cerberus, I’m PE. I don’t have to report nuttin’ to nobody.
          I’m private.
          I’m secretive.
          I’m guarding the gates of Hades an all… I don’t tell nobody nuttin’.

          So that also means, I don’t tell nobody if I happen to have purchased any credit default swaps (CDS’s), or if I happen to know that my younger brother’s soon to be ex-wife has bought them; the gal that I’ll be meeting in the Caribbean somewhere southeast of the Caymens… or maybe somewhere off the Jersey Isles… or whatever offshore spot I want to park sh*tloads of money.

          So how do we know that there aren’t powerful forces betting on the failure of these companies, who have already taken out CDSs on Chrysler (the obvious, most logical one), and on GM?

          I mean… it’s surely in the interests of many to make sure that some of these companies fail, assuming that those same interests hold CDSs that would pay out **only** if one or more of these companies fail.

          (And can sovereign wealth funds purchase CDSs…? Anyone know…?)

  18. demi says:

    Yeah. Shuster quoted (and they put the words up) a large portion of Jane’s blog about C. Kennedy.
    Buchanan says we just have to “live with it.”

    • 4jkb4ia says:

      That is Pat Buchanan displaying his authoritarian nature again. I am not even sure this Caroline Kennedy thing is a done deal. You want somebody who Chuck Schumer cannot walk over.

    • readerOfTeaLeaves says:

      Might I simply say that it’s wonderfully refreshing to see a media ‘personality’ work as hard as Rachel seems to…?

      I don’t recall when I’ve seen anyone as well-prepared for interviews as she consistently seems to be — other than, perhaps Bill Moyers.
      Very refreshing.

      • Petrocelli says:

        Besides being well versed, Rachel appears genuine, in listening to her guests’ opinions and her own responses … not canned like most of the other talking heads.

    • demi says:

      I don’t remember him mentioning Jane, by name. It happened so fast. My memory was that he was putting down “them”, meaning all the liberal bloggers.

      • readerOfTeaLeaves says:

        Demi, I don’t know what your Internet connection is like, but you may find this handy…..6#28117176
        (You have to tolerate ads at the beginning of most clips.)

        Petrocelli – Maddow, like Bill Moyers, appears to be blessed with remarkable listening skills and a phenomenal ability to be very well prepared for interviews. (Jon Stewart, Stephen Colbert, and Bill Maher also have this gift for incredibly attuned listening, IMHO. It’s remarkable — some kind of ‘Listening Alchemy’ that really gets wonderful responses from guests.) FWIW, I don’t think it can be taught; she’s lucky, but she probably also works very hard.

        Actually, despite all the anger at Couric from the Republicans, IMHO the real power of her interview with Palin was how well she **listened** to Palin; she was really concentrating, and it showed in that interview. The GOP was probably counting on Couric being ‘cute’ rather than professional.

        Anyone who makes that mistake with Maddow is going to end up looking really, really stupid ;-))

    • Leen says:

      soon after Obama’s speech at Mile High Stadium in Denver ran over to the stage in front of the MSNBC live broadcast. Buchanan was going on and on about Obama’s speech I shouted at Buchanan “I know you are a closet Democrat” Went a step further and called him a closet “Independent” That got to him he turned a round and stared at the peasants over his glasses looking at me smiling and shaking his head.

      It has been clear the last six years that Buchanan hates the Bush administration.

    • bmaz says:

      They own Jeep. And many people buy their trucks. The 300M is a good car and sells well and the new Challenger/Charger will do well also. None of these are efficient or green though.

      • JimWhite says:

        My diesel Ram can get up to 23 mpg when I keep the speed in the 60’s and a shade over 19 when I’m in a hurry. Not bad for something big enough to do the work around a horse farm.

        • Petrocelli says:

          4-6 years ago, the hardworking people behind the scenes showcased some amazing products from the Big 3. Chrysler launched the wonderful 300 but flubbed every thing else besides their Pickups.

          The Charger and Challenger will generate interest but the bread and butter subcompact, compact and mid-size categories were not given the same priority that the Japanese gave to theirs. Similarly their Magic Wagons lost the magic while Honda & Toyota continued to up the value in theirs.

          Don’t get me started on GM & Ford.

          This has been a failure of leadership and a failure to inspire the very best of American ingenuity … Executives should pay the price by being replaced by more inspiring leadership … the workers deserve that much.

          • bmaz says:

            No, those products are well on their way with both Ford and GM. In spades. You are biting on conventional wisdom that is flat out wrong. It may have been later than it should have been much sooner, the shift has been made and product is in production and the pipeline to production.

            • Petrocelli says:

              I am personal friends with some of those ‘geniuses’ who had a hand in designing some terrific concepts in 2001- 2004 and I stand by my statement.

              However, if you are correct and they have some great products in the pipeline, I’ll be very happy to see and drive them.

        • randiego says:

          A buddy of mine is a carpenter and has a Ford F-350 with the big diesel in it and gets somewhat less than that, but his numbers are still decent for a very large truck with lift kit and big tires. He put a high-performance chip in the computer and the torque and power are very impressive. (He gets all his diesel in Mexico, which helps).

          • readerOfTeaLeaves says:

            Hey, rowdiego — hope that sunshine is feeling much better, and that you didn’t get busted for trying to get her some Sudafed.

            prostratedragon: “Looting” ought to be a free download.
            Not to be a conspiracy nut, but when you look at how rapidly Paulson and Bernacke flipped out in Sept/October, then the fact that they blew of Sen Dodd and the Senate, then the fact that CDSs are all over the place… things sure don’t seem to add up, do they?

            The risks never showed up on the balance sheets.
            The bullshit ‘assets’ did, but not the fact that their value appears to have been frequently ’swapped’ for derivatives with virtually no basis in reality.
            Looks like a whole lot of people have investments in CDSs that won’t really pay off unless Company A, B, or C goes into Chapter 11.

            Cynical, to say the least.

            • prostratedragon says:

              Yeah, they’ve been not adding up to me in that way since I first heard about the teaser rates being granted 3 & 4 years ago. A huge bailout had to be the consensus expectation, shall we say.

              Btw, an empirical literature has built up on this paper (for instance search looting Akerlof Romer on Scholar), but so far mostly involving cases not in the U.S. (though if you look at the acknowledgements, it’s clear that many such papers are read in seminars here in the U.S.). Akerlof already has an econ Prize and Romer all but has one by consensus for work on growth and technology (maybe next year?), but they could both almost get another for this article, whose topic was completely off the map when they wrote.

        • jdmckay says:

          My diesel Ram can get up to 23 mpg when I keep the speed in the 60’s and a shade over 19 when I’m in a hurry. Not bad for something big enough to do the work around a horse farm.

          They’ve had huge failure rate of transmissions in those things. I read a couple years ago Cummins had threatened to stop supplying motors because of ‘em.

  19. NYSpotlight says:

    Hey Marcy, another thoughtful post. Thanks. But:

    The draft proposal has the “President’s designee” serving “at the pleasure of the President”. In other words, Obama gets to pick a new one on January 20. So who is going to do this pro bono for a 3-4 week gig, max? And who is going to enter into a loan that can be called, on the whim of the President’s designee, with a new designee coming in any minute?

    And finally, why oh why are our Congresscritters so in love with the delegation of special powers to an unconfirmed volunteer with unreviewable powers?

    Ken Feinberg is a bright and capable guy, but his expertise is in crafting and administering class action settlements, which, in essence, is what the 9/11 victim settlements were.

    I personally have more respect for the career professionals at the major agencies (at least, those prior to Bush 43)than to pass them all over for some volunteer who has No. Experience . Whatsoever. At. Trying To Structure . Anything . for . the . Public . Benefit.

  20. MadDog says:

    Status Report – Via the NYT: Washington Close to Deal on Bailout for Automakers

    And while I don’t approve of all of Nancy Pelosi’s micromanaging (If you leave the toilet seat up again, I’m gonna put you in bankruptcy!), I do approve of this:

    …Word that Democrats were willing to let Mr. Bush appoint the auto czar kicked off a guessing game over who might fit the bill. Two early names that were floated were Kenneth Feinberg, the lawyer who oversaw the 9/11 victims’ compensation fund, and John F. Welch Jr., the former chief executive of General Electric. Both names were quickly dismissed by Ms. Pelosi…

    (My bold)

    Jack Welch is second only to Junya himself as the last person on the planet who should be allowed anywhere near this.

    • readerOfTeaLeaves says:

      Totally with you on props to Speaker Pelosi for not letting ‘Jack’ Welch anywhere near the CarCzar role; not sure his ego would leave enough room for the Big 2.5 to fit into a room with him.

      FWIW, I don’t see Pelosi as micromanaging; maybe Rahm is whispering in her ear?
      CarCzar needs to keep things afloat until the Obama group can come in and address the larger background issues, IMHO: health care, environment.

      Last chance for Bush, Corker, Shelby, et al to dump their Trojan Horses into this agreement.

  21. prostratedragon says:

    John F. Welch Jr.

    Now that’s just too venomous.

    Not OT: For the love of god, will someone out there please sponsor downloads of PDFs of this article on google?

    From the abstract to “Looting” by George Akerlof and Paul Romer:

    Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society’s expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.

    At the very least, it would add a little zest to urban life were it suddenly known that just any old body on the street might have read the thing.

  22. MarkH says:

    If Jane is being mentioned by name on MSNBC that is a good thing. Really getting under their skins

    I agree she’s good on t.v., but it isn’t about ”getting under their skins”. It’s about being right and Truthful and getting America back on track to fulfilling the Ideals.

    • Leen says:

      I agree Jane is not trying to get under their skins, of course that is not her intentnion. She is calm cool and factual and this in and of itself seems to “get under their skin”

  23. JTMinIA says:

    Is it true that when Dan Quayle named his holding company he was trying for the name of his favorite comic-strip aardvark, but misspelled the name?

    (It’s almost two here and I’m a tad punchy.)

  24. jdmckay says:

    Reading your summary Marcy, looks to me like dems are pork barreling their own bailout bill… they just can’t help themselves.

    Also looks like, after they did TARP with a patriotic zeal while forgetting to lift the covers and figure out exactly what problem their .75T$ was gon’a fix, they’re oopsie “what-have-we-rott(ened)” recriminations kind’a looking like impetus to take a few posthumous whacks at this bridge-loan… won’t really accomplish whole hellu’ve a lot, but gosh darn it maybe it’ll make ‘em feel better about themselves.

    Got’a luv ‘em!!!

    But really, what’s the hurry anyway? They’ve still got a couple weeks before GM goes toes up, I’m sure they’ll iron out the wrinkles.

    I’ll tell ‘ya… sure makes me proud to watch this demockracy thingie @ work… good thing we’ve got a State Dept to promote it around the globe and a Pentagon to force those who don’t want it to eat it anyway.

    Nuth’n but change AFAI can see… yes weeee can!!!

  25. wavpeac says:

    Couple points:

    1) One, the art of listening. Nonjudgmental stance. People who are good listeners are able to hear from a position of learning instead of dogma. Ineffective listeners are dogmatic, have an agenda and put information into that format. They miss the nuances and information outside of their dogmatic views. Rachel, Bill Moyers (so gifted in this respect and honored by communication guru’s across the nation)are very adept at clearing their own preconceived notions as they “hear” or “consider” or “learn” from the other person. Then they might format what they hear and synthesize it into their own biases…but while hearing they try to remain free of the judgments. We I teach “active listening” to our hotline staff, I teach nonjudgmental stance. We put all the judgments we can on the table and debunk them before putting them on the lines.

    2)Is there a relationship between the current oil prices and the bail outs? Citibank and cerberus ties to Saudi? Is congress currently being held over a barrel? (of oil?) Just wondering if there might be a connection and what the connection might be. Could it explain why they treated citibank so differently? I have no clue about this stuff, the complexity of it all is mind boggling. It’s no wonder poor people haven’t a clue about what has happened to them over the last 8 years.

    3) I still think that the finance industry would like to keep mainstream America from understanding how much fraud has been going on. The numbers of posts that exist explaining and detailing the exact same fraud that I experienced in my mortgage and that many, many have experienced with credit cards (misapplied payments, unexplained fees, etc…) still have not surfaced as part of the problem.

    I understand one problem at a time, but some of these moves seems to serve these companies in keeping this from coming to light. There have been two differing worlds. One for the poor where the finance industries could do whatever they wanted to you, violating laws left and right, and making big bucks off the poor, stripping the poor, (hmmm sucking the blood out of them) and one for the wealthy and the credit worthy that would keep them from understanding the depth of the law breaking for the “other side”. I still feel this is the untold story and that it explains the foundation of what has happened in the finance industry. In the end the extent of the law breaking is going to boggle the mind. The extent of the damage to our economy, the american people and to the credit of Americans. These corrupt practices gutted our credit and finance system. One might even wonder if it had anything to do with terrorism?

  26. jdmckay says:

    All morning my brain has been floating me a picture…

    * GOP standing next to economy, blown it’s head (regulator) off w/smoking shotgun, neck gushing like Old Faithful. GOP: “That ought’a fix it”.
    * Nurse Pauslen w/thermometer up economy’s ass: “How do you read this thing… I think it’s frozen.”
    * Barney Frank injecting TARP syringe: “could only find 350cc’s of this stuff.”
    * Smiling Dem Donkey applying turnicate to ankle: “We’re trying to stop the bleeding.”
    * Obama sprinting in w/defibrillator on his chest, electrodes in each hand connected to GM power source (”we’ll have a few volts for you in 2011!!!”)… BO: “There’s hope… it just needs a good jolt.”

    * Bush: “Fundamentals look strong!!!”
    * Hillary: “Let’s make it universal.”
    * Wall Street: “Has he hit bottom yet?”
    * James Dobson: “God’s punishment for gay marriage.”
    * Norquist w/his tub: “Just needs a little bath.”

    Maybe one of Tole’s little characters in bottom right: “We need a commission to study the problem.”

    Geezus… no wonder we’re broke. Sure am sitting here feeling damn good about all the hrs put in these last 8 yrs getting this progressive gubernnment in there, yes’sirreee.

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