Thursday, February 22 , 2018, 1:12 am | Fair 39º

 
 
 
 

Scott Harris: Driven to Bankruptcy

When executives at the Big Three automakers can accept these three concessions, a bailout would be palatable.

Detroit is failing and they want us to help. For years the Big Three automakers (General Motors, Ford and Chrysler) have rebuffed the experts, turned a deaf ear to the demands of the consumer and arrogantly ignored the success of their competitors (now their betters). They have continued to sell through an antiquated franchise model and have reacted far too slowly, and probably too late, to changes in the marketplace. Now that the market has selected them for well-deserved extinction, they are turning to the federal government (us) for a minimum of a $25 billion bailout.

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Scott Harris
In a speech last week at the Ronald Reagan Library, Treasury Secretary Henry Paulson acknowledged how important the auto industry is to America and that its impending failure is not good for the country. Yet he doesn’t intend to use any of the $700 billion at his disposal to bail out Detroit, saying, “It doesn’t do any good to put money in unless there is a clear path to viability.”

While, like most Americans, I despise the idea of bailing out an arrogant, antiquated, failing industry, I also fear the consequences of up to 2.5 million more Americans being out of work — many through no fault of their own.

So, taking the liberty of speaking for the American people, I offer a three-point plan that will make this bailout palatable, if only barely. When the top executives at General Motors, Ford and Chrysler and the top union executives are willing to accept the following three concessions, I will happily ask the federal government to turn over the $25 billion.

» 1. Every executive at the Big Three will tender a resignation, effective 90 days from receipt of the bailout money. A special executive team will be installed to run all three companies and will use the 90 days to choose to accept or reject the resignations on an individual basis. All golden parachute arrangements for outgoing executives are canceled. This will allow us to unload the weak, keep the strong and recruit new and innovative thinkers. For the sake of recruiting simplicity, please start by looking at Honda, Nissan and Toyota; they seem to have some pretty sharp people.

» 2. The unions are going to pitch in as well. The average hourly compensation for the Big Three is $73, while Toyota in Kentucky is $48 per hour and for all U.S. workers it is $28 per hour. Even if we had forward-thinking executives in Detroit, they would be crippled paying workers 50 percent more per hour than their competition.

It is a ridiculous situation and has to end for the Big Three to have any chance of surviving. We are going to ask the Toyota plant in Kentucky — successfully making cars and money — to share their union contracts with the Big Three and their unions. The unions are going to accept these contracts, verbatim, starting the first day the bailout dollars roll in. For those union bosses and union members screaming bloody murder, please remember the choice is not between $73 per hour and $48 per hour, but rather $48 per hour and nothing.

» 3. The $25 billion is not actually a bailout, or even a loan. It is payment for 83,000 electric- or solar-powered cars ($25 billion divided by average sales price of $30,000) that will travel 75 miles per hour and travel at least 250 miles between charges. They have until 2015 to deliver the cars.

If — and only if — the Big Three executives and unions are willing to accept these terms, we will happily purchase the 83,000 cars and pay now, in full. This is an offer, not a negotiation. It is our money. We have worked hard for it and have no intentions of giving it away to a group of people who proved to be incompetent and greedy.

This is what I’d say to the Big Three executives: If you choose not to accept our offer, there are two alternatives. One, simply go out of business. No doubt it will be painful, but only in the short run. The airlines did it, some survived and some didn’t, but the planes are still flying and consumer demands are being met. Two, ask the U.S. oil companies for a handout. They have made billions of dollars in profits this year alone and might just be motivated to see you stay in business.

Either way, we, the people, will survive. It’s up to you whether you do.

Scott Harris is a political commentator. Read his columns and contact him through his Web site, www.scottharris.biz, or e-mail him at [email protected]

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